By Kathleen M. Roberts
On July 18, 2017, the U.S. Environmental Protection Agency (EPA) published in the Federal Register its proposed rule on the Renewable Fuel Standard (RFS) Program: Standards for 2018 and Biomass-Based Diesel Volume for 2019. The rulemaking proposes the annual percentage standards for cellulosic biofuel, advanced biofuel, and total renewable fuel for motor vehicle gasoline and diesel produced or imported in 2018, as well as biomass-based diesel in 2019, as reported in the Biobased and Renewable Products Advocacy Group’s (BRAG®) blog post EPA Releases Proposed 2018 RFS Volume Requirements. The proposed volume requirements are:
- 238 million gallons for cellulosic biofuel in 2018, down from 311 million gallons in 2017;
- 4.24 billion gallons for advanced biofuel in 2018, down from 4.28 billion gallons in 2017;
- 19.24 billion gallons for renewable fuel in 2018, down from 19.28 billion gallons in 2017; and
- 2.1 billion gallons for biomass-based diesel 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. Comments on the proposed rule must be received by August 31, 2017
While the proposed reduction in the amount of renewable fuel is relatively small, many in the biofuels industry are concerned that it sends the signal to the market that the U.S. renewable fuel industry will no longer grow. The proposed volume requirements may undercut the Administration’s goal of reducing U.S. reliance on foreign energy and reviving U.S. manufacturing, despite President Trump’s repeated pledge to support the ethanol industry.
As previously reported in the BRAG blog post EPA Announces Public Hearing On RFS Program,
EPA will hold a Public Hearing for Standards for 2018 and Biomass-Based Diesel Volume for 2019 Under the RFS Program
to listen to arguments from all interested stakeholders to inform future rulemakings on the volume requirements. The hearing will take place at 9:00 a.m. on August 1, 2017
, in Washington, D.C. EPA has until November 30, 2017
, to issue the rulemaking in final.
By Kathleen M. Roberts
The U.S. Environmental Protection Agency (EPA) will hold a public hearing on the Renewable Fuel Standard [RFS] Program: Standards for 2018 and Biomass-Based Diesel Volume for 2019 proposed rule. The hearing will take place at 9:00 a.m. on August 1, 2017, and will provide an opportunity for EPA to gather data, views, and arguments on the proposed rulemaking from interested stakeholders. While EPA does not plan to respond to presentations, the Agency may ask clarifying questions. EPA intends to use the information to inform a future rulemaking to reset the statutory volumes for cellulosic, advanced, and total biofuels pursuant to the Clean Air Act. In resetting the mandatory biofuel production requirements under the RFS program, EPA will need to review the implementation of the program during previous years and coordinate with the Secretary of Energy and the Secretary of Agriculture. Factors that EPA must consider in its analysis include:
- The impact of renewable fuels on the environment;
- The impact of the fuels on energy security;
- Production rates of fuels;
- Economic impacts of fuels; and
- The impact of renewable fuel on U.S. infrastructure.
By Lauren M. Graham, Ph.D.
On July 11, 2017, the Energy Information Administration (EIA) issued its June Short-Term Energy Outlook (STEO). EIA considered EPA’s recent rulemakings on the 2017 RFS volume requirements and proposed 2018 RFS volume requirements when developing its STEO for 2017 and 2018.
Biodiesel production averaged 101,000 barrels per day (b/d) in 2016, and, according to EIA, is expected to increase to an average of 105,000 b/d in 2017 and to 109,000 b/d in 2018. Biomass-based diesel imports are expected to fall from 54,000 b/d in 2016 to 53,000 b/d in 2017 but rise to 59,000 b/d in 2018.
Ethanol production averaged 1.0 million b/d in 2016 and is expected to average slightly above 1.0 million b/d in 2017, which would be a record, but will likely decline slightly in 2018. Ethanol consumption averaged about 940,000 b/d in 2016 and is forecast to increase slightly in 2017 and 2018. As a result, the ethanol share of the total gasoline pool will increase to nearly 10.1% in both 2017 and 2018. Only marginal increases in higher-level ethanol blends are assumed to occur during the STEO forecast period.
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 Lynn L. Bergeson and Margaret R. Graham
On June 30, 3017, the National Academies of Sciences, Engineering, and Medicine (NAS) released its final version of its report Preparing for Future Products of Biotechnology, which it states “analyzes the future landscape of biotechnology products and seeks to inform forthcoming policy making [and] … identifies potential new risks and frameworks for risk assessment and areas in which the risks or lack of risks relating to the products of biotechnology are well understood.” This report is a collaboration among a committee of experts including the Committee on Future Biotechnology Products and Opportunities to Enhance Capabilities of the Biotechnology Regulatory System (Committee), the Board on Life Sciences, the Board on Agriculture and Natural Resources, the Board on Chemical Sciences and Technology, and the Division on Earth and Life Studies and sponsored by the U.S. Environmental Protection Agency (EPA), the U.S. Department of Agriculture (USDA), and the U.S. Food and Drug Administration (FDA). Lynn L. Bergeson was an external contributor to the Committee’s deliberations and presented before the Committee on the subject of the biotechnology regulatory system.
The report includes sections on emerging trends and products of biotechnology; the current biotechnology regulatory system; understanding risks related to future biotechnology products; opportunities to enhance the capabilities of the biotechnology regulatory system; and an index on congressionally defined product categories that FDA regulates; as well as conclusions and recommendations that were included in our blog item on the prepublication version.
More information on the regulatory issues of biotechnology products is available on our biobased products blog under key word biotechnology, as well as the Bergeson & Campbell, P.C. (B&C®) regulatory developments website under key phrase biobased products, biotechnology.
By Richard E. Engler, Ph.D.
On June 12, 2017, the U.S. Environmental Protection Agency (EPA) awarded the 2017 Green Chemistry Challenge Award winners at a ceremony in Washington, D.C. in conjunction with the 21st Annual Green Chemistry and Engineering Conference. The award recognizes landmark green chemistry technologies developed by industrial pioneers and leading scientists that turn potential environmental issues into business opportunities, spurring innovation and economic development. The American Chemical Society (ACS) Green Chemistry Institute convened an independent panel of technical experts to judge the 2017 submissions and make recommendations to EPA regarding the winners.
This year's winners and technologies are:
Over the course of the Green Chemistry Challenge’s 22 year history, EPA estimates that winning technologies are responsible for annually reducing the use or generation of more than 826 million pounds of hazardous chemicals, saving 21 billion gallons of water, and eliminating 7.8 billion pounds of carbon dioxide equivalent releases to air. While we are saddened that this very successful voluntary program is slated to be defunded in the President's FY2018 budget, we applaud this year’s winners. Those who value the green chemistry program should consider contacting their Senators and Representatives to encourage continued support of this program. It has had outsized benefits for such a modestly funded program.
By Lauren M. Graham, Ph.D.
On May 23, 2017, President Trump released the Administration’s proposed budget for fiscal year (FY) 2018, which includes significant cuts to the U.S. Department of Energy (DOE), U.S. Environmental Protection Agency (EPA), and U.S. Department of Agriculture (USDA) budgets. According to the proposed budget, funding for DOE would be cut by 5.6 percent to $28 billion, with $636 million allotted for the Office of Energy Efficiency and Renewable Energy (EERE) and $56.6 million for the Bioenergy Technologies Office (BETO). The proposed DOE budget aims to eliminate the Advanced Research Projects Agency – Energy (ARPA-E), which advances high-potential, high-impact energy technologies that are too early for private-sector investment.
The proposed EPA budget of $5.7 billion would cut funding by 31 percent when compared to estimated 2017 appropriations. Funding for the Clean Power Plan and climate change research and partnership programs, such as the Energy Star program, would be eliminated. Also included in the cuts would be a $17 million reduction in funding for the Federal Vehicle and Fuels Standards and Certifications program, which oversees the Renewable Fuel Standard (RFS) program. According to EPA, it will continue to implement, maintain oversight of, and evaluate compliance with the RFS program in 2018.
Under the proposed budget, funding for mandatory USDA programs would decrease from $123 billion in FY 2017 to $116 billion in FY 2018 and funding for discretionary programs would decrease from $26 billion to $21 billion. The Biomass Crop Assistance Program and the Rural Energy for America Program are among the programs targeted for elimination.
More information on the proposed agency budgets is available at the DOE, EPA, and USDA websites.
By Lauren M. Graham, Ph.D.
On May 10, 2017, the U.S. Environmental Protection Agency (EPA) released Renewable Identification Numbers (RIN) generation data for April 2017, reporting that nearly 1.5 billion RINs were generated during the month.
Nearly 17.3 million D3 cellulosic biofuel RINs were generated in April, bringing the total for 2017 to 49.9 million, including 1.3 million D3 RINs generated for ethanol, 17.9 million generated for renewable liquefied natural gas, and 30.7 million generated for renewable compressed natural gas. Of the 49.9 million RINs, 44.7 million were generated by domestic producers, and 5.2 million were generated by importers.
More than 279.6 million D4 biomass-based diesel RINs were generated in April, resulting in a total of 973.3 million for 2017. The majority of RINs, 736.5 million, were generated for biodiesel, with 235.9 million for non-ester renewable diesel, and 937,219 for renewable jet fuel. Nearly 694.9 million RINs were generated by domestic producers, with 168.5 million generated by importers and nearly 109.9 million generated by foreign entities.
For D5 advanced biofuel, 7.0 million RINs were generated in April, which brought the total for 2017 to nearly 22.7 million. Naphtha accounted for the majority of RINs generated, 10.9 million, with 8.1 million generated for ethanol, 890,603 generated for heating oil, and 2.7 million generated for non-ester renewable diesel. In 2017, all D5 advanced biofuel RINs were generated by domestic producers.
Nearly 1.2 billion RINs were generated for D6 renewable fuel in April, resulting in a total of nearly 4.9 billion for 2017. The majority of RINs were generated for ethanol, nearly 4.8 billion, with nearly 84.8 million generated for non-ester renewable diesel. Nearly 4.8 billion RINs were generated by domestic producers, with 3.8 million generated by importers and nearly 84.8 million generated by foreign entities.
The data indicates that no D7 cellulosic RINs have been generated in 2017.
By Kathleen M. Roberts
On May 9, 2017, Senator Elizabeth Warren (D-MA), along with seven additional Democratic Senators, sent a letter to the Securities and Exchange Commission (SEC), the U.S. Environmental Protection Agency (EPA), and the Commodities Futures Trading Commission (CFTC) requesting an investigation into the activities of Carl Icahn for potential insider trading, market manipulation, and other securities and commodities law violations in the renewable fuel credit market. The letter states that the actions of and the massive profit earned by Icahn raise questions related to conflict-of-interest rules that apply to government officials, and questions regarding insider trading and market manipulation of renewable fuel credits, known as Renewable Identification Numbers (RIN) -- which SEC, EPA, and CFTC have jurisdiction over. EPA oversees the issuance and trading of RINs. CFTC works with EPA to ensure integrity in the RIN market since it has broad authority to prevent insider trading and other market manipulation in commodities markets and futures markets. SEC has jurisdiction to investigate whether Icahn’s actions as a senior adviser to President Trump affected CVR Energy's stock value or the accuracy of the company's annual and quarterly financial reporting and disclosure.
The Senators maintained that RIN insider trading and market manipulation hurts all parties, including biofuel producers and refineries, and requested an investigation by the three agencies based on the publically available information detailed in the letter. The Senators also requested information on whether EPA Administrator Scott Pruitt and SEC Chairman Jay Clayton would recuse themselves from the investigation.