EPA proposes new Renewable Fuel Standards (RFS2) for 2011

By Agri-Pulse Staff

© Copyright Agri-Pulse Communications, Inc.

Washington, July 12 – The U.S. Environmental Protection Agency (EPA) proposed 2011 percentage standards Tuesday for the four fuels categories under the agency’s Renewable Fuel Standard program, known as RFS2.

The Energy Independence and Security Act of 2007 (EISA) established the annual renewable fuel volume targets, reaching an overall level of 36 billion gallons in 2022. To achieve these volumes, EPA calculates a percentage-based standard for the following year. Based on the standard, each refiner, importer and non-oxygenate blender of gasoline determines the minimum volume of renewable fuel that it must ensure is used in its transportation fuel.

The proposed 2011 overall volumes and standards are:

· Biomass-based diesel (0.80 billion gallons; 0.68 percent)
· Advanced biofuels (1.35 billion gallons; 0.77 percent)
· Cellulosic biofuels (5 – 17.1 million gallons; 0.004 – 0.015 percent)
· Total renewable fuels (13.95 billion gallons; 7.95 percent)

Based on analysis of market availability, EPA is proposing a 2011 cellulosic volume that is lower than the EISA target. EPA will continue to evaluate the market as it works to finalize the cellulosic standard in the coming months. Overall, EPA remains optimistic that the commercial availability of cellulosic biofuel will continue to grow in the years ahead.

EPA is also proposing changes to the RFS2 regulations that would potentially apply to renewable fuel producers who use canola oil, grain sorghum, pulpwood, or palm oil as a feedstock. This program rule would allow the fuel produced by those feedstocks dating back to July 1, 2010 be used for compliance should EPA determine in a future rulemaking that such fuels meet certain greenhouse gas reduction thresholds.

The second change would set criteria for foreign feedstocks to be treated like domestic feedstocks in terms of the documentation needed to prove that they can be used to make qualifying renewable fuel under the RFS2 program.

EPA is seeking public comment on the renewable fuel standards and the proposed changes to the RFS2 regulations, which are due 30 days following publication of the proposed rule in the Federal Register.

July 1, 2010, was the deadline that major refiners, blenders, and importers had to meet for reporting, registration, and other key compliance requirements under EPA’s expanded renewable fuels standard program.

Renewable Fuels Association spokesman Matt Hartwig reacted to the EPA announcement by stating that "While this may be prudent for EPA based on market conditions, it does send a chilling effect through the investment community with respect to cellulosic ethanol technologies." He added that "EPA's estimates underscore the need for Dept. of Energy and USDA to construct loan guarantee programs that work for cellulosic ethanol companies" and that "current and proposed loan guarantee programs have flaws that prevent cellulosic ethanol producers to take full advantage of these important programs. As such, a lack of avaialble investment has slowed the deployment of these technologies at a time when they are becoming most necessary."
According to Hartwig, "EPA must move to increase the amount of ethanol the nation is permitted to use. Administrator Jackson should approve for use E15 in all vehicles, eliminating unnecessary confusion and truly opening the market for ethanol so the RFS can be successful. Other tactics, such as investment in ethanol infrastructure and the mandated sale of flexible fuel vehicles capable of using higher ethanol blends would be helpful."

For information on the standards and regulations, go to: www.epa.gov/otaq/fuels/renewablefuels/regulations.htm

For information on renewable fuels, go to: www.epa.gov/otaq/fuels/renewablefuels/index.htm

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