US EPA proposes reduced 2014 renewable fuel standards

16 November 2013

The US Environmental Protection Agency (EPA) proposed 2014 standards for cellulosic biofuel, biomass-based diesel, advanced biofuel, and total renewable fuel under the agency’s Renewable Fuel Standard program, known as RFS2. Compared to the 2013 quotas, the volumes of advanced biofuel and total renewable fuel would be reduced, while the volume of biomass-based diesel would remain unchanged.

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, every year EPA issues percentage-based renewable fuel standards for the following year. Based on the standard, each refiner, importer and non-oxygenate blender of gasoline or diesel determines the minimum volume of renewable fuel that it must ensure is used in its transportation fuel.

The proposed 2014 overall volumes and percentage standards are listed below.

EPA proposed to reduce the renewable fuel volumes to address two constraints: (1) the ethanol blend wall and (2) production capacity limits for advanced biofuels. Most of RFS2 requirements are met by blending ethanol into gasoline. Because the sales of gasoline in the United States have not been growing as once estimated, the percentage standards are increasing faster than it was expected. Considering that the practical maximum blend level for ethanol is 10% (E10), the RFS2 program is approaching a blend wall—a point where biofuels cannot be incorporated into fuels at the required levels.

A number of further renewable fuel concerns became apparent since the adoption of the 2007 EISA Act. The energy supply and energy security issues that EISA attempted to address are less important today due to the increasing production of shale gas and light tight oil in the United States. Furthermore, the environmental benefits of biomass-based fuels have been often overestimated—their greenhouse gas reduction effects diminish or become negative once a full lifecycle analysis is performed, including indirect land use change (ILUC) effects such as the expansion of agriculture onto non-agricultural land. Other problems with agricultural biofuels include competition with food crops, high water demand, and “energy sprawl” due to very low power density of fuel crops. Ethanol fuel made from corn has been particularly criticized. Due to the low energy return on investment (EROI) of corn-ethanol, the US ethanol mandates may be just a form of an ill-conceived agricultural subsidy with no economic, energy security, or environmental benefits. In view of these and other biofuel issues, the Renewable Fuel Standard is under review by US Congress.

Under the EPA proposal, the volumes of biomass-based diesel remain unchanged for 2014 and for 2015, at the 2013 level of 1.28 billion gallons. Biodiesel can be used to fulfill the requirements for both biomass-based diesel and for advanced biofuels. Under EPA classification, US-made soy-based biodiesel reduces GHG emissions by more than 50%, which is the minimum reduction for the latter category. At the 2012 production level of almost 1.1 billion gallons, biodiesel filled 87% of the 2012 advanced biofuel requirement.

The EPA proposal has been criticized by the National Biodiesel Board (NBB). Earlier this month, a group of 32 senators from biodiesel producing states called on the US Administration to establish a biodiesel volume requirement of at least 1.7 billion gallons, consistent with this year’s projected production.

The standard for cellulosic biofuels has been increased to 17 million gallons, from 6 million gallons in 2013. This mandate, however, remains significantly lower than the EISA target of 1.75 billion gallons. The EISA volumes cannot be reached due to the lack of commercial availability of cellulosic biofuels.

Source: US EPA