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Have you heard about EPA's final ruling for the Renewable Fuel Standard (RFS2) program?

Posted by admin on Dec. 3, 2015  /  Bio Fuels, Clean Fuels Events - National/Regional, Technical Workshops, Clean Fuels Infrastructure, Clean Cities and Communities  /  Subscribe 0

Do you keep hearing about a new renewable fuel standard? Not sure what it all means? Learn all about the new ruling, and what it means for the nation's fuel market. 

Below we have compiled a list of benefits and considerations regarding the U.S. Environmental Protection Agency’s (EPA) final ruling for the Renewable Fuel Standard (RFS2) program (http://www2.epa.gov/sites/production/files/2015-11/documents/rfs-2014-2015-2016-annual-rule-frm.pdf). Please note, that the pros and cons listed below do not necessarily reflect our opinions, but are the opinions expressed by those in the biofuels industry.

EPA recently announced the 2014, 2015, and 2016 final volume requirements and associated percentage standards for cellulosic biofuel, biomass-based diesel, advanced biofuel, and total renewable fuel that must be blended into transportation fuel under RFS2. EPA also announced the final volume requirements for biomass-based diesel for 2017. EPA did not release the final volume requirements for 2014 and 2015 until now, though they did release a proposed final ruling in May. The final ruling considered more than 670,000 public comments, and relied on the latest, most accurate data available. The final ruling announced higher volumetric requirements than the proposed ruling from May in order to overcome the so-called “blend wall,” provide more fueling options at the pump, boost renewable fuel production, and provide support for expanding the biofuels industry. For more information new RFS2 ruling, please see the Alternative Fuels Data Center’s Recent Federal Actions page (http://www.afdc.energy.gov/laws/recent?key=federal). 

The final renewable fuel volumes are as follows:

The associated renewable fuel percentage standards are as follows:

 Pros of the final ruling:

• The final ruling increases the volume requirements for 2016, requiring obligated parties to blend higher amounts of renewable fuel into their transportation fuel.
  
• The final volume requirements for 2016 (and 2017 for biomass-based diesel) represent significant growth over historical levels.
  
• The increase in volume requirements from previous years means that we can displace billions of gallons of petroleum diesel with clean-burning biofuels over the next few years, resulting in fewer emissions, more jobs, and more competition in the fuels market.
  
• EPA finalized the 2014 and 2015 volume requirements at levels that reflect the actual amount of domestic biofuel used in those years.
  
• Many are pleased that the volume requirements have been finalized after long delays and that requirement levels have increased from the original proposal. 
  
• The volume requirements for 2016 (and 2017 for biomass-based diesel) are now available, allowing RFS2 implementation to get back on track and enable EPA to remain on schedule for future years.
  
  

Cons of the final ruling:

• The final volume requirements differ from the Energy Independence and Security Act of 2007. However, these changes took into account biofuel supply, the ethanol blend wall, current infrastructure, and market-based limitations.
  
• EPA did not release the final volume requirements for 2014 and 2015 until now, causing those who have not met the final requirements to be at a disadvantage.
  
• The increase in volume requirements may cause uncertainty in the marketplace, slowing investments in second-generation biofuels.
  
• The final ruling continues to rely on the ‘distribution waiver,’ which “was rejected by Congress when the RFS was enacted into law. Of particular concern is that by using such a waiver, the oil industry is being rewarded for its unwillingness to follow the law and invest in infrastructure to move toward cleaner, renewable fuel, which sets a dangerous precedent for the future of the program.” 
  
• The final ruling does not specify how or on what timeline EPA is expects to address waivers in the cellulosic biofuel pool, “which currently allow the oil industry to avoid buying cellulosic biofuel in favor of cellulosic waiver credits (CWCs) at the end of each compliance year.“
  
• The final ruling reduced the corn-ethanol requirement for 2015 to 14.05 billion gallons, compared to the original 15 billion gallons prescribed in the RFS2.
  
• The final ruling requires mixing 18.11 billion gallons of biofuels into the nation’s fuel market next year. “That figure, which includes corn ethanol, biodiesel and next-generation ‘cellulosic’ ethanol, is well below the 22.3 billion gallons required under a 2007 law.”??
  

For more information on the pros and cons of the new RFS2 ruling, we suggest you see the opinion pieces written by the biofuels industry:

• National Biodiesel Board: http://nbb.org/news/nbb-press-releases/press-release-display/2015/11/30/biodiesel-association-welcomes-renewable-fuels-announcement.
  
• Renewable Fuels Association:
  http://www.ethanolrfa.org/2015/11/rfa-epas-final-rfs-rule-puts-future-of-biofuels-climate-policy-in-hands-of-oil-industry/.
  
• Advanced Biofuels Business Council: http://advancedbiofuels.org/epa-proposal-better-but-still-encourages-oil-companies-to-block-renewable-fuels/#more-240.
  
• Advanced Biofuels Association: http://www.advancedbiofuelsassociation.com/page.php?sid=1&id=9.

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