EPA issues long-awaited RFS volume obligations

On Friday, May 29, 2015, EPA finally issued a proposed rule setting the annual volume obligations for renewable fuels under the Renewable Fuel Standard (RFS). This proposal included the long-delayed volume mandates for 2014 as well as newly-proposed mandates for 2015 and 2016. More details on EPA’s proposal can be found at the agency’s website, and the yearly volume mandates are shown in the table below, taken from the Fact Sheet available at the EPA website. This is only a proposed rule, which EPA intends to finalize by November 30, 2015.

EPArvo

The proposal is being widely reported and commented upon, so my observations today will be brief. I’ll primarily make two observations. First, as expected, EPA pulled back somewhat from its original proposed mandates for 2014, which attracted considerable controversy when issued in November 2013, but the current proposal for 2014 still falls short of the original Congressional mandates. For example, in November 2013 EPA proposed a total mandate of 17 million gallons for cellulosic biofuels: the current proposal is for 33 million; in 2013 the proposed mandate for advanced biofuels was 2.2 billion gallons; the current proposal calls for 2.68 billion. EPA based the 2014 mandates on its estimates of actual production for the year, but these targets still represent a substantial pullback from the volumes originally called for in the 2007 RFS2 legislation, to the detriment of several sectors of the biofuel industry, particularly including corn starch derived ethanol. Although arguably moot, so long after 2014 has ended, this proposal is sure to continue to generate controversy within the industry.

My other observation is that, through its modestly-escalating proposed mandates for 2015 and 2016, EPA has attempted to preserve the spirit and intent of the RFS law, which was to encourage the growth of the renewable fuel industry in order to reduce greenhouse gas emissions and the nation’s dependence on foreign fossil fuels. But here too, the volumes fall short of what is specified in the original law, and are sure to be opposed by many in the biofuel industry, particularly the corn ethanol sector. Industry representatives have, so far, expressed concern that these mandates were influenced by undue concern over the so-called ethanol blend-wall, which has effectively limited the amount of ethanol in the nation’s fuel supply to about 10% of the volume of gasoline sold.

This is only a proposed rule, and EPA will be taking public comments and holding a public hearing, all before making the rule final later this year. Expect much further controversy. In fact, I’m heading today to the Fuel Ethanol Workshop in Minneapolis, where I expect that EPA’s announcement will be a major topic of discussion, particularly in tomorrow’s plenary sessions. I hope to report on the FEW either in this blog or in Advanced Biotechnology for Biofuels later this week.

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