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.

By Lynn L. Bergeson

On August 23, 2018, U.S. Senators Patty Murray (D-WA), Roy Blunt (R-MO), and 37 others submitted a bipartisan letter, asking the U.S. Environmental Protection Agency (EPA) to increase the renewable volume obligations under the Renewable Fuel Standard (RFS) as proposed by EPA in June 2018. Under the aforementioned proposed RFS, EPA would raise the advanced biofuel volume for 2019 to 4.88 billion gallons and the biomass-based diesel volume for 2020 to 2.43 billion gallons. The bipartisan group argues that although these increases may be promising, the potential of biodiesel is still taken too lightly. Not only does the biodiesel industry have prodigious growth potential, its expansion would significantly generate jobs in the U.S. In particular, the Senators emphasized the need to also recognize small refiners’ economic hardship exemptions during the 2019 compliance year.

Tags: Senate, RFS, EPA

 

By Lynn L. Bergeson

Under the Clean Air Act, the U.S. Environmental Protection Agency (EPA) is required to set renewable fuel percentage standards annually. On July 10, 2018, EPA announced a request for comments on a proposed rule to address “volume requirements for cellulosic biofuel, advanced biofuel, and total renewable fuel that are below the statutory volume targets.” The proposal also included the applicable volume of diesel from biomass for 2020. In response to EPA’s request, the Biotechnology Innovation Organization (BIO), a Biobased and Renewable Products Advocacy Group (BRAG®) member, submitted comments to EPA on August 17, 2018. BIO emphasized in its comments the vitality of the Renewable Fuel Standard (RFS). Arguing that the proposed rule promulgates a risk to the biofuels industry and rural economy, BIO urged EPA to resolve the issues that may be caused by raising the volumes of advanced and cellulosic biofuel. Among these issues, the undercut to these increases in volume by the issuance of small refinery exemptions would stop the reallocation of gallons to other obligated parties.

Tags: BIO, EPA, CAA, RFS, Biofuel

 

By Lynn L. Bergeson

On August 1, 2018, the U.S. Senate Committee on Environment and Public Works (EPW Committee) held a hearing entitled “Examining EPA’s Agenda:  Protecting the Environment and Allowing America’s Economy to Grow.”  Testifying at the hearing was Andrew Wheeler, the U.S. Environmental Protection Agency’s (EPA) Acting Administrator.  Witness testimony and an archive of the hearing are available online.  The hearing was intended to provide Wheeler with the opportunity to present himself for the first time in front of the EPW Committee as the Acting Administrator, and to update the EPW Committee on EPA’s agenda since the resignation of Scott Pruitt, EPA’s former Administrator.  Wheeler’s testimony highlighted three main priorities for EPA moving forward:  (1) regulatory certainty between EPA and state/local governments; (2) improvement of programs within EPA; and (3) increased transparency in risk communication. On biofuels, Wheeler stated that EPA has approved pathways for biofuels derived from sorghum which “lays the groundwork for more homegrown fuels under the Renewable Fuels Standard (RFS) and adds diversity to the nation’s biofuel mix.”

Tags: Senate, EPA, RFS

 

By Lynn L. Bergeson

On July 24, 2018, Andrew Wheeler, newly appointed Acting Administrator at the U.S. Environmental Protection Agency (EPA), held a briefing that outlined his plans for the Renewable Fuel Standard (RFS).  He plans on following Scott Pruitt’s work overhauling the policy, including counting ethanol exports toward annual biofuels quotas and bringing corn and oil groups together to overhaul the RFS system.  Wheeler also signed a final notice approving a variety of pathways for renewable fuel derived from sorghum, including biofuel and biodiesel.  The newly approved pathways meet greenhouse gas emission (GHG) reduction requirements to generate credits or Renewable Identification Numbers (RIN) for biomass-based diesel and advanced biofuels under the RFS program.

Tags: Wheeler, EPA, RFS

 

By Lynn L. Bergeson

On July 20, 2018, the U.S. Court of Appeals for the Fourth Circuit (Fourth Circuit) ruled that EPA must reconsider its denial of Ergon-West Virginia, Inc.’s (Ergon) application for a small refinery waiver under the RFS.  The Fourth Circuit stated that EPA relied on an “error-riddled” analysis when it denied the exemption.  Ergon is a small refinery based in West Virginia (with a daily production of 23,500 barrels) that produces primarily diesel which is not easily blended and sold in the local market.  The number of small refinery hardship waivers has jumped in recent years, with 48 waivers granted in 2016 and 2017, prompting outcry from the biofuel industry that the increased waivers undercut the RFS program.


 

By Lynn L. Bergeson

On July 18, 2018, the U.S. Environmental Protection Agency (EPA) held a Public Hearing for Proposed Renewable Fuel Standards (RFS) for 2019 and Biomass-Based Diesel Volume for 2020.  The National Biodiesel Board (NBB) testified at this meeting that EPA should set the 2020 Biomass-based Diesel volume at 2.8 billion gallons, stating that it aligns with the goals that Congress set for the RFS program, the volume is achievable in 2020, and that it will better fulfill the promise of the RFS program.  These statements come on the heels of a July 12, 2018, request by the Trump administration that the U.S. Court of Appeals for the District of Columbia Circuit throw out a lawsuit over previous small refiner hardship exemption waivers that EPA had granted.  Government lawyers argued that the lawsuit did not challenge a “final” agency action, so individual exemptions must be challenged in local courts.  EPA’s small refinery hardship exemptions have doubled in 2016 and 2017 when compared with previous years, with NBB estimating a decreased demand of 300 million gallons for biodiesel.  NBB argued that increasing the RFS for 2019 and 2020 is needed to reduce the uncertainty that has been caused by issuing the small refinery hardship exemptions.

Tags: Biofuel, RFS

 

By Lynn L. Bergeson

On July 3, 2018, the U.S. Environmental Protection Agency (EPA) announced it was holding a public hearing for the proposed rule “Renewable Fuel Standard Program:  Standards for 2019 and Biomass-Based Diesel Volume for 2020” on July 18, 2018, at 9:00 a.m. in Ypsilanti, Michigan.  83 Fed. Reg. 31098.  The proposed rule was published in the Federal Register on July 10, 2018.  83 Fed. Reg. 32024.   The notice states that the public hearing will provide interested parties the “opportunity to present data, views, or arguments concerning the [proposed rule],” and “EPA may ask clarifying questions during the oral presentations but will not respond to the presentations.”  Parties wishing to testify at the hearing should notify Julia MacAllister at (734) 214-4131 or via e-mail at .(JavaScript must be enabled to view this email address) by July 13, 2018.  EPA will be posting a complete set of documents related to the proposal for public inspection on http://www.regulations.gov, Docket ID No. EPA-HQ-OAR-2018-0167.  Comments on the Proposed Rule are due by August 17, 2018.  More information on the proposed rule is available in our blog item “EPA Releases Proposed Rule Setting 2019 RFS Requirements.”


 

By Lynn L. Bergeson

On June 26, 2018, Scott Pruitt, Administrator of the U.S. Environmental Protection Agency (EPA), signed a proposed rule that includes 2019 Renewable Fuel Standard (RFS) percentage standards for cellulosic biofuel, biomass-based diesel, advanced biofuel, and total renewable fuel, as well as 2020 renewable volume obligations (RVO) for biomass-based diesel.
 




These blend levels increase requirements from 2018 but are still lower than the statutory levels set by Congress under the RFS. The levels, along with the fact that the proposed rule does not address the reduction in price that Renewable Identification Numbers (RIN) have suffered as a result of EPA’s increased use of small refiner hardship waivers, have resulted in criticism of the rule by biofuel groups. Brent Erickson, Executive Vice President of the Biotechnology Innovation Organization’s (BIO) Industrial & Environmental Section released a statement regarding the proposed rule, stating:
 
We welcome EPA’s decision to raise the advanced and cellulosic biofuel volumes in its proposal, which will help propel the industry forward in 2019. However, the advanced biofuels industry is still suffering the effects of the Agency’s decision to arbitrarily limit growth for low carbon biofuels in 2018, by setting a backward looking RFS requirement. The 2019 volumes should be higher, to correct from last year and also spur growth for the coming year.

EPA’s decision to forgo reallocation of gallons displaced from small refinery waivers at the behest of the petroleum industry is disappointing. In order to ensure a favorable and supportive investment climate for advanced and cellulosic biofuel producers, EPA must reallocate the gallons from the small refinery waivers already issued and into the future.

A comment period will start following publication of the proposed rule in the Federal Register and comments will be due by August 17, 2018. Comments can be filed online at www.regulations.gov under Docket ID No. EPA-HQ-OAR-2018-0167. EPA plans to schedule a public hearing on the proposed rule.

Tags: EPA, RFS, Biofuel

 

By Lynn L. Bergeson

On June 4, 2018, several biofuel and agricultural groups, including the Renewable Fuels Association, the Biotechnology Innovation Organization, the American Coalition for Ethanol (ACE), and the National Biodiesel Board, among others, petitioned the U.S. Environmental Protection Agency (EPA) regarding EPA’s Renewable Fuel Standard (RFS) obligations.  The ACE announcement states that the petition asks EPA to “change its regulations to account for lost volumes of renewable fuel resulting from the unprecedented number of retroactive small refinery exemptions from [RFS] obligations recently granted by EPA.”  The petition states that Section 211(o)(2)(a)(i) of the Clean Air Act “requires EPA to ensure that the annual required volumes of renewable fuel are introduced into the nation’s transportation fuel supply,” and that EPA’s “suddenly reversing its prior policy and granting retroactive exemptions to so many small refineries without adjusting its Annual Standard Equations to account for the resulting lost volumes,” means that EPA is “failing to meet its statutory obligation to ‘ensure’ that transportation fuels in the United States contain the applicable volumes of renewable fuel.”  The petition requests EPA to (1) convene a proceeding to reconsider the annual standard equations in 40 C.F.R. § 80.1405(c); and (2) convene a proceeding to reconsider its final action entitled “Periodic Reviews for the Renewable Fuel Standard Program” (82 Fed. Reg. 58364 (Dec. 12, 2017)).

Tags: EPA, RFS, Biofuel

 

By Lynn L. Bergeson

On June 8, 2018, petitioners in the District of Columbia Circuit (D.C. Circuit) case Coffeyville Resources Refining, et al. v. EPA filed their final briefs in the case challenging EPA’s final rule that established:  (1) the annual percentage standards for cellulosic biofuel, biomass-based diesel (BBD), advanced biofuel, and total renewable fuel that apply to all motor vehicle gasoline and diesel produced or imported in the year 2017; and (2) the applicable volume of BBD for 2018.  81 Fed. Reg. 89746 (Dec. 12, 2016).  Final briefs were filed by petitioners Coffeyville Resources Refining & Marketing, LLC, et al. and the National Biodiesel Board (NBB).  The lengthy briefs reiterate the petitioners’ arguments that EPA acted arbitrarily and capriciously in relying on incomplete and flawed information and methodology when setting the cellulosic biofuel requirements and other 2017 obligations, and that EPA violated 42 U.S.C. § 7545(o)(2)(B)(ii) when it set the 2018 BBD volume based on factors that are not among those Congress instructed the Agency to consider, including the 2018 advanced-biofuel volume.  Respondent EPA and intervenors for EPA also filed final briefs.  EPA argued that its use of the cellulosic waiver was reasonable and reasonably used and applied; the D.C. Circuit has previously upheld its cellulosic biofuel projection methodology; and it properly assessed and set the BBD volumes for 2018.  Oral argument in this case has not yet been scheduled.  All of the briefs are available on Inside EPA’s website (subscription required).

Tags: Biofuel, RFS

 
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