The Biobased and Renewable Products Advocacy Group (BRAG) helps members develop and bring to market their innovative biobased and renewable chemical products through insightful policy and regulatory advocacy. BRAG is managed by B&C® Consortia Management, L.L.C., an affiliate of Bergeson & Campbell, P.C.

Activity on the federal Renewable Fuel Standard (RFS) is in full swing on Capitol Hill. Last week, the House Energy & Commerce Committee's Subcommittee on Energy and Power issued its fifth and final white paper on the RFS seeking input from stakeholders on "implementation issues" with the policy. The white paper is available online.

The white paper follows the Subcommittee's hearing last month at which government witnesses testified on the effectiveness and implementation of the RFS. Specifically in this latest white paper, the Subcommittee is requesting, among other things, input on the effectiveness of EPA's annual process of setting the required volume obligations (RVO) for each of the four types of fuels under the RFS: biodiesel, conventional, advanced, and cellulosic. The questions appear to target oil industry criticisms that EPA sets the annual RVOs for cellulosic biofuels too high compared with the availability of those biofuels on the market.

On Monday, June 15, 2013, the Subcommittee announced that it will hold a two-day hearing on the RFS beginning on July 23, 2013, to examine stakeholder input on the policy. The hearing details, which will be updated closer to the hearing date, are available online. A witness list has not yet been published, but witnesses are expected to include representatives from all sides of the debate, including refiners, biofuel producers, and environmentalists. Comments made by Subcommittee Chair Ed Whitfield (R-CA), combined with the white papers and hearings, suggest that legislation may be introduced to modify the RFS.

Members of the Fuels America Coalition, including many in the biofuels industry, are working to avoid this result and protect the RFS in its current form. The group is advocating this message on Capitol Hill this week ahead of next week's House Subcommittee hearing, and as the Senate Energy and Natural Resources Committee this week held a hearing "to explore the effects of ongoing changes in domestic oil production, refining and distribution on U.S. gasoline and fuel prices." In response to expected criticisms during the hearing of the RFS and its impact on gas prices, members of the Fuels America Coalition made public statements attempting to "dispel the myths" the refiners portray about the policy, including its impact on gas prices. The group argues that the RFS has had only a positive effect on gas prices, with the increase in ethanol helping to reduce gas prices.

In the meantime this week, the refining industry announced that it is strengthening its campaign for the repeal of the RFS.




On July 12, 2013, the U.S. Court of Appeals for the District of Columbia issued its decision in Center for Biological Diversity v. EPA. In a 2-1 decision, the court vacated the U.S. Environmental Protection Agency's (EPA) rule (the Deferral Rule) exempting bioenergy and other biogenic sources of greenhouse gas emissions from new greenhouse gas permitting requirements under EPA's Tailoring Rule for a period of three years. This deferral was meant to allow EPA time to study and develop a proper method of accounting for greenhouse gas emissions from these sources. The court held that EPA did not meet the standards to justify its Deferral Rule under any of the four doctrines it had invoked.

According to EPA, biogenic carbon emissions are "emissions of CO2 from a stationary source directly resulting from the combustion or decomposition of biologically-based materials other than fossil fuels and mineral sources of carbon." Examples of biogenic CO2 include: CO2 generated from the biological decomposition of waste in landfills, fermentation during ethanol production, combustion of the biological fraction of municipal solid waste or biosolids, combustion of the biological fraction of tier-derived fuel, and combustion of biological material, including all types of wood and wood waste, forest residue, and agricultural material, among others. Therefore, carbon emissions from some facilities producing biofuels and renewable chemicals could be subject to these new permitting requirements under the Tailoring Rule. The requirements of the Tailoring Rule are triggered when stationary sources meet certain emissions thresholds.

This decision is important for industry and creates uncertainty going forward. Without future legal, legislative, or regulatory action, it appears likely that stationary sources meeting the emissions thresholds under the Tailoring Rule will be subject to the new permitting requirements.




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