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.
On February 21, 2017, President Trump sent a letter to the attendees of the National Ethanol Conference to reiterate his commitment to ethanol and the Renewable Fuel Standard (RFS). The letter states that Trump and his Administration value the importance of renewable fuels to the nation’s energy strategy and economy. In the letter, Trump reaffirmed his commitment to working with the Renewable Fuels Association (RFA) and others to reform regulations that impede growth, increase consumer costs, and eliminate jobs without providing sufficient environmental or public health benefit.
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.
On February 22, 2017, the American Petroleum Institute (API) announced plans to submit comments to EPA in support of its proposal to deny petitions requesting EPA initiate a rulemaking process to change the point of obligation for compliance under the RFS program. During the press call, Frank Macchiarola, the Group Director of Downstream and Industry Operations at API, stated that changing the point of obligation would create significant uncertainty and complications in the RFS program and the Renewable Identification Number (RIN) market, and add time and an administrative burden for EPA and regulated entities. Macchiarola suggested policymakers focus on fixing the blend wall problem and setting fuel policies consistent with vehicle compatibility. API supports Congressional efforts to repeal or reform the RFS program and encourages lower volume requirements in 2018 to address the short-term challenges facing the refining industry. Macchiarola stated that EPA should consider the adoption of cellulosic technologies, E15 and E85 use, and the demand for E0 when establishing 2018 RFS standards.
On February 13, 2017, seven democratic Senators sent a letter to White House Counsel Don McGahn requesting details on Carl Icahn’s role in the Trump Administration and the extent of his influence over the Renewable Fuel Standard (RFS) program. On December 21, 2016, it was announced that Mr. Icahn would serve the Trump Administration as a special advisor for overhauling federal regulations. The Senators’ letter highlights concerns over Icahn’s public statements regarding RFS obligations and his role as chairman of the board and majority shareholder of Icahn Enterprises. The Senators noted that, as of September 30, 2016, Icahn Enterprises owned an 82 percent stake in CVR Energy, which is an oil refiner required to meet the RFS obligations. The letter requests that McGahn provide answers to a number of questions regarding Icahn, including whether:
On February 16, 2017, a coalition of Iowa farmers, renewable fuel producers, and retailers urged Scott Pruitt, just prior to his being confirmed as the U.S. Environmental Protection Agency (EPA) Administrator, to protect the Renewable Fuel Standard (RFS) by rejecting the petition to change the program’s point of obligation. The coalition, which includes the Iowa Renewable Fuels Association (IRFA), the Iowa Corn Growers Association (ICGA), Petroleum Marketers and Convenience Stores of Iowa (PMCI), and the Iowa Biodiesel Board (IBB), stated that it is committed to opposing a change in the point of obligation since such a change would be devastating to wholesalers and retailers, who have invested in supporting the RFS program, and to consumers, who would experience a change in pricing dynamics at fuel terminals. Agreeing with EPA’s decision under the Obama Administration, the coalition stated that changing the point of obligation 11 years into the program would create unnecessary chaos and delay. A final decision will be made once EPA has reviewed the public comments on the issue.
On January 31, 2017, two bills were introduced in the U.S. Congress that propose to reform the Renewable Fuel Standard (RFS) and the national biofuels mandate. The first bill would require the National Academy of Sciences (NAS) to assess the performance, safety, and environmental impact of mid-level ethanol, and the implications of the use of mid-level ethanol blends compared to gasoline blends containing ten percent or less ethanol. The second bill would reduce the U.S. Environmental Protection Agency’s (EPA) cellulosic biofuel volume requirements under the RFS program to what is commercially available pending a NAS report on the environmental and economic impacts and feasibility of large scale production of cellulosic biofuel.
On January 18, 2017, Christopher Grundler, the Director of the Office of Transportation and Air Quality for the U.S. Environmental Protection Agency (EPA), signed a notice inviting comment on its analysis of the upstream greenhouse gas (GHG) emissions from the production of sugar beets for use as biofuel feedstock. The notice describes the analysis performed, which considers the extraction of non-cellulosic beet sugar for conversion to biofuel and the use of the remaining beet pulp for animal feed, and how EPA may use the analysis to determine whether biofuels from sugar beets qualify as renewable fuels under the Renewable Fuel Standard (RFS) program based on the GHG emission threshold requirement. The notice states that biofuels from sugar beets could qualify as renewable fuel or advanced biofuel, depending on the type and efficiency of the fuel production process technology used. A prepublication version of the report is available now, with a final publication date to be announced. A 30 day public comment period will begin after the formal proposal is published in the Federal Register.
On January 11, 2017, the Government of Ontario released a discussion paper titled “Developing a Modern Renewable Fuel Standard For Gasoline in Ontario,” which provides context for the new RFS requirements. The discussion paper explains that Ontario aims to keep the following considerations in mind when designing the RFS policy:
On January 17, 2017, the U.S. Environmental Protection Agency (EPA) wrote to the American Petrochemical and Fuel Manufacturers (AFPM) denying its petition for partial supplemental waiver of the 2016 cellulosic biofuel standard under the Renewable Fuel Standard (RFS). The letter was sent in response to AFPM’s December 28, 2016, petition for a supplemental waiver on the basis of an inadequate domestic supply of cellulosic biofuel, as reported in the Biobased and Renewable Products Advocacy Group’s (BRAG ® ) blog post Petition for Waiver of 2016 Cellulosic Biofuel Volumetric Requirements. In its response, EPA stated that the actual number of cellulosic biofuel Renewable Identification Numbers (RIN) or waiver credits that will need to be retired for compliance will not be known until the compliance deadline, since the compliance obligation is calculated on a percentage basis. EPA anticipates that an additional 19 million 2016 cellulosic biofuel RINs will be generated in 2017, resulting in 197 million 2016 cellulosic RINs overall. When combined with the 39 million carryover RINs from cellulosic biofuel produced in 2015, EPA estimates the total number of cellulosic biofuels RINs to be 236 million, which is greater than the 227 million RINs expected to be necessary for compliance.
On January 26, 2017, EPA published a final rule delaying the effective date of 30 EPA regulations, including the RFS Program: Standards for 2017 and Biomass-Based Diesel Volume for 2018 final rule. The rulemaking follows the Presidential directive to postpone for sixty days the effective dates of all regulations that had been published in the Federal Register but had not yet taken effect to give the President’s appointees or designees the opportunity for further review and consideration of new or pending regulations. The new effective date is March 21, 2017. More information on the RFS final rule is available in the BRAG blog post “EPA Publishes Final 2017 RFS Requirements.”