MOUNT VERNON, Ill. – The Renewable Fuel Standard appears to
hitting a wall. The “blend wall,” that is.
The RFS, a federal mandate requiring production of
increasing amounts of renewable fuels such as corn-based ethanol, faces a
problem: There isn’t enough demand to handle the amount required.
Scott Irwin, a University of Illinois ag economics
professor, discussed the issue at a recent economic summit sponsored by the
university’s ag college.
“The collision between the blend wall and the RFS mandate
for ethanol is at the heart of everything that has really gone on in the last
year respecting controversies of the mandate,” he said.
The standard, which became law in 2007, is aimed at reducing
dependence on foreign oil while reducing greenhouse gas emissions. But the 10
percent ethanol limit, coupled with lower-than-expected fuel consumption, has
placed the mandate on a collision course with itself.
The RFS has been set at 13.8 billion gallons in 2013 and
14.4 billion gallons in 2014. A mixture of corn ethanol, biodiesel and
cellulosic fuels, however, will likely fall short of that goal, Irwin told
“Houston, we have a problem,” he said. “On the one hand, we
have a law that says that in 2013 you need to use 13.8 billion gallons. But with
10 percent blends, the maximum we can use is around 13 billion.”
The mandate increases to 15 billion gallons by 2015. The
Environmental Protection Agency is proposing to reduce mandated levels.
The 10 percent ethanol blend that represents the maximum
most vehicles are fitted for will not provide enough demand.
Flex fuel blends of up to 85 percent ethanol may be used
only in newer vehicles, and sale of E-85 has been lower than expected. A tax
credit for ethanol use expired in 2011.
In addition, the production of renewable fuels made from
cellulosic materials such as wood chips, corn stover or switchgrass, has fallen
woefully short of expectations.
“By 2013, we were supposed to be producing 1 billion gallons
of cellulosic ethanol. We produced 6 million gallons,” Irwin said. “So, clearly,
cellulosic production, while making some progress, is nowhere near what was
forecast in the standard developed in 2005 and modified in 2007.”
The EPA requirement for cellulosic renewables originally was
set at 1.75 billion gallons. The agency has instead proposed an adjustment of
only 17 million gallons.
Likewise, the target for so-called advanced biofuels — such
as biodiesel made from soybean oil — has been reduced to 2.2 billion gallons,
down from the 3.75 billion gallons originally expected.
The advanced biofuels requirement also is unreachable based
on production of soybeans and other oilseeds, Irwin said.
“In 2015, you’d have to get 2.8 billion gallons of biodiesel
into the U.S. market. I don’t know if we could even produce that,” he said.
“It’s a huge number. More than 20 billion pounds of feedstock would be required.
That’s more than half of all the fats and oils produced in the United States. We
have had dramatic pressure on our vegetable oil markets in this
Further complicating the issue is legal wrangling between
the petroleum industry and green energy advocates regarding a challenge of the
EPA’s implementation of the RFS.
“We are in an extraordinary situation, one that I never
encountered in my professional career,” Irwin said. “I can’t even find it in a
history book, where so much may potentially ride on one federal judge. Much will
depend on the ultimate outcome of this legal process.”