Recent Developments on Renewable Fuels Policies

It’s been a busy start to 2015 for me, and so I haven’t had much free time for new posts to the blog. However, there have been numerous developments relating to the regulations and policies affecting renewable fuels. The following are brief summaries of some of these developments.

U.S. Renewable Fuel Standard


Schedule announced for issuance of annual volume mandates
.The U.S. EPA has still not issued a final rule to set the volume mandates under the RFS for 2014. Instead, the agency has been working on a single proposal to cover volume mandates for 2015, 2015 and 2016. More recent developments have affected these plans. On March 18, the American Fuel & Petrochemical Manufacturers and American Petroleum Institute filed suit against EPA in the U.S. District Court of the District of Columbia, asking the Court to require EPA to promptly issue the delayed volume mandates for 2014 and 2015. Late last week, it was reported that EPA will enter into a consent agreement with AFPM and API to settle this suit, under which EPA will commit to a schedule for issuing the delayed mandates. According to EPA’s website, this schedule is as follows.

  • Finalize the 2014 volume mandate by November 30. In addition, although not covered by the consent order, EPA said that it would issue a new proposal for the 2014 mandates by June 1, reflecting the volumes of renewable fuel that were actually used in 2014, to be the basis for the final rule due by November.
  • Issue proposed 2015 and 2016 volume mandates by June 1 and finalize them by November 30 (the 2016 commitment is outside the scope of the consent decree).
  • Also outside the consent decree, EPA said it will finalize the biomass-based diesel volume requirements for 2017, as required under the law, on the same June-to-November schedule.

Cellulosic waiver credits. In the meantime, the agency has announced other activities, including issuance of a direct final rule clarifying how EPA calculates cellulosic waiver credit prices under the RFS. Cellulosic waiver credits are available for obligated parties to show compliance with the cellulosic biofuel standard in any year in which EPA reduces the cellulosic volume mandate, as it has done for the past several years.

New RFS pathway petitions. EPA has also begun granting petitions for new fuel pathways under the RFS, under the procedures it announced in September 2014 (as described in my October 2, 2014 entry and follow-up posts in Advanced Biotechnology for Biofuels). Most of the approved petitions are for corn starch-to-ethanol pathways under the newly-instituted Efficient Producer program, but recent approvals have also included a new pathway for production of ethanol from algae, submitted by Algenol Biofuels.

EU Renewable Energy Directive


Proposed revisions to the RED. There’s been quite a bit of back-and-forth about the proposed amendment to the EU Renewable Energy Directive (RED) and its companion legislation the Fuel Quality Directive, but it appears that a political compromise has been reached. As last reported in Biofuel Policy Watch, European legislators and bureaucrats have been trying to reach agreement on amendments to these directives that would cap the contribution that food-based biofuels could make to the EU-wide goal of deriving at least 10% of energy in the transport sector from renewable fuels by 2020, while also finding a way to encourage the development and use of advanced biofuels not relaying on agricultural feedstocks. On April 1, 2015, representatives of the European Commission, the Parliament and the individual member states, meeting in so-called “trilogue” sessions, have agreed to cap food-based fuels at 7%, up from the original level of 5% first proposed in 2012. However, there appears to be no binding target for the percentage of the fuel supply to be attained by advanced biofuels.

A final compromise appears to have been reached by members of Parliament on April 14. According to reports, the amendment to the RED will cap food-based biofuels at 7%, will set an optional target of 0.5% for advanced biofuels, and would require reporting of indirect land use change (ILUC) but not require that ILUCs be taken into account when calculating carbon intensities under the directive. The proposal still needs the approval of the full Parliament, which is reportedly scheduled for April 29.

Oregon Low Carbon Fuel Standard


Oregon Clean Fuels Program will be fully implemented
. The early months of 2015 saw a great deal of activity regarding the Oregon Clean Fuels Program, a state law similar to the low-carbon fuel standard that has been in place in California for some time. It was last reported in the blog that the state’s Environmental Quality Commission had issued regulations to implement the Program, but that the legislature was about to again begin work on passing legislation to remove the “sunset date” under which the law would have expired at the end of 2015. A bill to remove the sunset date was approved by the Oregon Senate in February and debate in the House took place through early March, amidst a political scandal that drove newly-reelected Governor John Kitzhaber from office. Final House approval of the bill came on March 4. Kitzhaber’s successor, Governor Kate Brown, signed the bill on March 12, ensuring the continued implementation of the law going forward. I hope to analyze the regulations in a future blog post, but it is good to see that this law will remain on the books and will begin to be implemented. If progress can also be made in Washington State, we may yet see a situation where the entire U.S. and Canadian west coast would maintain incentives for adoption of renewable transportation fuels.

D. Glass Associates, Inc. is a consulting company specializing in government and regulatory support for renewable fuels and industrial biotechnology. David Glass, Ph.D. is a veteran of over thirty years in the biotechnology industry, with expertise in industrial biotechnology regulatory affairs, U.S. and international renewable fuels regulation, patents, technology licensing, and market and technology assessments. Dr. Glass previously served as director of regulatory affairs for Joule Unlimited Technologies, Inc. More information on D. Glass Associates’ government and regulatory consulting capabilities, and copies of some of Dr. Glass’s prior presentations on biofuels and biotechnology regulation, are available at www.slideshare.net/djglass99 and at www.dglassassociates.com. The views expressed in this blog are those of Dr. Glass and D. Glass Associates and do not represent the views of any other organization with which Dr. Glass is affiliated. Please visit our other blog, Advanced Biotechnology for Biofuels

 

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