By Kathleen M. Roberts
On July 5, 2017, the U.S. Environmental Protection Agency (EPA) issued proposed volume requirements under the Renewable Fuel Standard (RFS) program for cellulosic biofuel, advanced biofuel, and total renewable fuel for 2018, as well as biomass-based diesel for 2019. The proposal lowers the blending requirement for all renewable fuel with the exception of biomass-based diesel, which maintains the 2017 blending requirement. The proposed volume requirements are:
Cellulosic biofuel, from 311 million gallons in 2017 to 238 million gallons in 2018;
Advanced biofuel, from 4.28 billion gallons in 2017 to 4.24 billion gallons in 2018;
Renewable fuel, from 19.28 billion gallons in 2017 to 19.24 billion gallons in 2018; and
Biomass-based diesel, 2.1 billion gallons in 2018 and 2019.
These volumes would set the percentage standards at 0.131 percent for cellulosic biofuel, 2.34 percent for advanced biofuel, 10.62 percent for renewable fuel, and 1.74 percent for biomass-based diesel. The proposed rule will be open for comment for 45 days following the official publication in the Federal Register.
By Lauren M. Graham, Ph.D.
On April 24, 2017, U.S. Department of Justice (DOJ) attorneys representing the U.S. Environmental Protection Agency (EPA) and the renewable fuels and petroleum industries presented oral arguments before a three-judge panel of the U.S. Court of Appeals for the D.C. Circuit regarding the petition to review the renewable volume obligations (RVO) for 2014-2016. The petition, which was filed on January 8, 2016, by seven biofuel and agricultural groups, challenged EPA’s authority to set volume requirements for biofuel blending below standards put forth in the 2007 Renewable Fuel Standard (RFS) law. During the oral arguments, Samara Spence, a DOJ attorney, argued that insufficient infrastructure prevented EPA from setting a higher advanced biofuel standard in the 2014-2016 final rule. Seth Waxman, an attorney representing Americans for Clean Energy, argued that EPA misunderstood its authority under the statute. According to statements from the federal appeals court judges, scaling back the blending requirements may be viewed as an abuse of EPA’s authority.
In a joint statement in response to the oral arguments, the American Coalition for Ethanol, BIO, Growth Energy, the National Corn Growers Association, the National Sorghum Producers, and the Renewable Fuels Association stated that they are “optimistic that the Court will honor Congress’ intent and remove these and other obstacles EPA has impermissibly erected to cleaner and more sustainable renewable fuels from entering the marketplace.” More information on the petition to review the RFS for 2014, 2015, and 2016 is available in the Biobased and Renewable Products Advocacy Group (BRAG®) blog post “Biofuel, Corn, And Sorghum Farmers Challenge Lowered RFS Volumes.”
On March 16, 2017, 23 Senators, including Senator Chuck Grassley (R-IA) and Senator Amy Klobuchar (D-MN), sent President Trump a bipartisan letter requesting that he maintain the point of obligation under the Renewable Fuel Standard (RFS) program. In the letter, the Senators remind Trump that the RFS program was adopted to provide stability for renewable fuel producers and that the U.S. Environmental Protection Agency (EPA) determined that, to meet this goal, the point of obligation should be placed on refiners and importers. Shifting the point of obligation downstream would create little incentive for refiners to produce the necessary blendstocks, which would make downstream entities unable to comply. The letter outlines the detrimental effects that changing the point of obligation would have on refiners, blenders, marketers and retailers, and states that the proposed changes are broadly opposed by the majority of the transportation fuel market. The Senators acknowledge Trump’s commitment to the RFS program and state that they look forward to working with Trump to ensure the RFS program continues to aid in job creation and economic growth across the country.
On March 21, 2017, the renewable fuel volume requirements for 2017, which were issued in final by EPA on December 12, 2016, were implemented. The effective date for the 2017 requirements was delayed following the Presidential directive to postpone the implementation of new regulations to allow for review by the new administration. Although EPA has yet to publish an announcement on the matter, industry stakeholders have welcomed the 2017 biofuel volumes and 2018 biomass-based diesel volumes. As reported in the Biobased and Renewable Products Advocacy Group (BRAG®) blog post “EPA Publishes Final 2017 RFS Requirements,” the volume requirements are:
||311 million gallons of cellulosic biofuel in 2017;
||4.28 billion gallons of advanced biofuel in 2017;
||19.28 billion gallons of renewable fuel in 2017; and
||2.1 billion gallons of biomass-based diesel in 2018.
On March 13, 2017, the South Dakota Farmers Union announced that the National Farmers Union had passed a resolution calling for the U.S. Environmental Protection Agency (EPA) to open the market to higher blends of ethanol during its annual meeting in San Diego. The resolution, which was brought forward by the South Dakota Farmers Union delegation, promotes the use of higher blended fuels, such as E30, as a way to expand the retail fuels infrastructure and support the Renewable Fuel Standard (RFS).
In addition to passing the resolution, the National Farmers Union filed legal comments regarding EPA’s overreach in its interpretation of the Clean Air Act (CAA), which limits ethanol content to 15 percent. Doug Sombke, President of South Dakota Farmers Union, called on EPA and all government regulators to reverse statements and policies that unfairly limit the amount of ethanol in fuel and stated that both the state and national organization continue to seek greater market access for higher blended fuels.
On March 2, 2017, Congressman Bob Goodlatte (R-VA) reintroduced the Renewable Fuel Standard (RFS) Reform Act, which aims to guide the debate and reform of the ethanol mandate. According to Goodlatte, the RFS program failed to lower prices at the pump and resulted in unintended and profound effects on consumers, energy producers, livestock producers, retailers, and the environment. The RFS Reform Act, which had 42 bipartisan cosponsors, would eliminate corn-based ethanol requirements, place a ten percent cap on the amount of ethanol that can be blended into conventional gasoline, require EPA to set cellulosic biofuels targets at levels produced by the industry, and decrease the total volume of renewable fuel content in gasoline sold or introduced into commerce from 2017 through 2022.
On February 23, 2017, the Sierra Club filed a notice of intent to sue EPA for failure to conduct the required environmental impact analysis on the RFS program
. The notice states that EPA failed to assess and report to Congress on the environmental and resource conservation impacts of the RFS program and failed to complete the required anti-backsliding study to determine whether the renewable fuel volumes adversely impacted air quality. According to the notice, EPA has issued only one triennial report on the environmental impact of the program despite the requirement under the Energy Independence and Security Act of 2007 (EISA) that EPA report to Congress every three years. EISA also mandates that EPA complete an anti-backsliding study within 18 months of the law’s passage, which EPA has failed to conduct. Although EPA has made commitments to complete the second triennial report by December 31, 2017
, and the anti-backsliding study by September 30, 2024
, the Sierra Club stated that such a delay disregards the purpose of the reporting requirements, which is to inform EPA’s annual RFS volume developments and inform Congress of the program’s impacts.