US EPA proposes 2018 renewable fuel volumes

13 July 2017

The US Environmental Protection Agency (EPA) signed a proposed rule setting the minimum amount of renewable fuels that must be supplied to the market in 2018 under the Renewable Fuel Standards (RFS) program. The proposal includes the required volumes of cellulosic biofuel, advanced biofuel, and total renewable fuel to be supplied in transportation fuels in 2018, as well as biomass-based diesel (BBD) to be supplied in 2019.

In an apparent departure from earlier renewable fuel policy trends, the EPA proposed a reduction of the total 2018 RFS volume compared to 2017, from 19.28 billion to 19.24 billion ethanol-equivalent gallons. The 2018 cellulosic biofuel volume is proposed at 238 million gallons, down from the 311 million gallons in 2017. The volume of conventional renewable fuels (renewable fuel minus advanced biofuel) remains unchanged at 15 billion gallons.

The statute requires that the volume of BBD—which includes biodiesel and renewable diesel—must be set 1 year in advance of the other fuel categories. The proposed BBD volume for 2019 is 2.1 billion gallons, unchanged from last year’s rule.

The EPA is beginning a technical analysis that will inform a future rule to reset the statutory volumes for cellulosic, advanced, and total biofuels. The law requires this reset when certain conditions are met, said the agency. The EPA is also taking comment on addressing concerns that some RFS obligations are increasingly met with imported fuel from Brazil, Argentina and Indonesia. Additionally, the agency is assessing higher levels of ethanol-free gasoline and acting on an existing memorandum of understanding with the US Commodity Futures Trading Commission (CFTC) to analyze and address a host of market concerns, including the need for increased transparency.

The reduction of the proposed 2018 RFS volumes, even if small, represents a change in the US renewable fuels policy. With the exception of 2014—when the EPA reduced the total renewable fuel volume from 2013 because of limitations in blending ethanol in gasoline—the agency increased the RFS volumes every year. The reasons behind the new RFS policy have not been explained in the published regulatory package and remain unclear. A thorough analysis od the proposed rule has been conducted by the ICCT.

Increases in RFS volumes have been generally supported by the agricultural lobby and the biofuels industry, and opposed by oil companies and the automotive industry, while environmental groups remain divided on the issue. Most types of commercial biofuels are considered counterproductive in reducing GHG emissions, especially if indirect land use change (ILUC) emissions are accounted for in the analysis.

The EPA is is on track to meet the November 30^th statutory deadline to make the proposed Renewable Volume Obligations (RVOs) final, said the agency.

Source: US EPA