WASHINGTON — The U.S. Environmental Protection Agency
proposed a reduction in the 2014 Renewable Fuel Standard statutory levels for
ethanol and advanced biofuels.
The proposal presented for public comment is to cut ethanol
to 13 billion gallons from the 14.4 billion goal for 2014 set in the RFS. It
also freezes the biodiesel level at 1.28 billion gallons and reduces cellulosic
biofuels to 17 million from 1.75 billion gallons.
Biodiesel production is on track to set a production record,
exceeding 1.7 billion gallons this year.
The proposal seeks to put the RFS program on a steady path
forward — ensuring the continued long-term growth of the renewable fuel industry
— while seeking input on different approaches to address the “E10 blend wall,”
according to an EPA statement.
Nearly all gasoline sold in the U.S. now is E10, which is
fuel with up to 10 percent ethanol. While E85 is an option for some vehicles,
growth in that area has been slow and primarily limited to the country’s
“Production of renewable fuels has been growing rapidly in
recent years. At the same time, advances in vehicle fuel economy and other
economic factors have pushed gasoline consumption far lower than what was
expected when Congress passed the Renewable Fuel Standard in 2007,” the EPA
“As a result, we are now at the E10 blend wall, the point at
which the E10 fuel pool is saturated with ethanol. If gasoline demand continues
to decline, as currently forecast, continuing growth in the use of ethanol will
require greater use of higher ethanol blends such as E15 and E85.”
The EPA also is seeking comment on petitions for a waiver of
the renewable fuel standards that would apply in 2014. EPA expects that a
determination on the substance of the petitions will be issued at the same time
that the agency issues a final rule establishing the 2014 RFS.
Once the proposal is published in the Federal Register, it
will be open to a 60-day public comment period.
The 2014 proposal seeks input on what additional actions
could be taken by government and industry to help overcome current market
challenges and to minimize the need for adjustments in the statutory renewable
fuel volume requirements in the future.
“Looking forward, the proposal clearly indicates that growth
in capacity for ethanol consumption would continuously be reflected in the
standards set beyond 2014,” the EPA said. “EPA looks forward to further
engagement and additional information from stakeholders as the agency works in
consultation with the departments of Agriculture and Energy toward the
development of a final rule.”
“For the first time, EPA has acknowledged that the blend
wall is a dangerous reality and that breaching it would serious impacts on
America’s fuel supply and would be harmful for American consumers,” American
Petroleum Institute President Jack Gerard said in a conference call.
The National Biodiesel Board warned the proposal would cause
plant closures and layoffs in the U.S. biodiesel industry and called on the
Obama administration to recommit to developing American-made advanced
“This proposal, if it becomes final, would create a
shrinking market, eliminate thousands of jobs and likely cause biodiesel plants
to close across the country,” said Anne Steckel, NBB vice president of federal
“It also sends a terrible signal to investors and
entrepreneurs that jeopardizes the future development of biodiesel and other
Advanced Biofuels in the United States.”
Twenty-one animal agriculture groups, including the National
Cattlemen Beef Association, National Pork Producers Council, National Chicken
Council, Milk Producers Council and National Turkey Federation, signed a letter
in support of the EPA’s proposal.
“We appreciate this action as it acknowledges a problem
exists with the current policy. The inflexible RFS mandate continues to have a
detrimental impact on the economy and makes feeding animals risky because our
industries are not competing on a level playing field,” the letter from animal
“Today is a step in the right direction. However, it is the
responsibility of the Congress to find a lasting solution to this rigid,
inflexible program and put livestock and poultry producers back on equal
standing in the marketplace.”
“While only a proposed rule at this point, this is the first
time that the Obama administration has shown any sign of wavering when it comes
to implementing the RFS,” said Brooke Coleman, executive director of the
Advanced Ethanol Council.
“EPA is in the right ballpark for cellulosic biofuels, and
we are confident that the final number will be the right one for the industry in
2014. But bigger picture issues must be resolved in the final rule because
advanced biofuel investors also pay attention to the big picture.
“What we’re seeing is the oil industry taking one last run
at trying to convince administrators of the RFS to relieve the legal obligation
on them to blend more biofuel based on clever arguments meant to disguise the
fact that oil companies just don’t want to blend more biofuel. The RFS is
designed to bust the oil monopoly. It’s not going to be easy.”
“This recommendation is ill-advised and should be condemned
by all consumers because it is damaging to our tenuous economy and shortsighted
regarding the nation’s energy future,” said National Corn Growers Association
President Martin Barbre.
“Agriculture has been a bright spot in a failing U.S.
economy, but current corn prices are below the cost of production. EPA’s ruling
would be devastating for family farmers and the entire rural economy.”
“This announcement is a significant hit for family farmers,”
said Paul Taylor of Esmond, president of the Illinois Corn Growers
“Corn prices are already below the cost of production, and
this announcement will cause corn prices to drop even further. Family farmers
will have to borrow money to cover their family’s living expenses as a result of
this announcement, while big oil realizes massive profits yet again.”
Rep. Bob Goodlatte, R-Va., who along with Reps. Peter Welch,
D-Vt.; Jim Costa, D-Calif.; and Steve Womack, R-Ark., authored the Renewable
Fuel Standard Reform Act, also commented about the EPA decision.
These same members led an October letter signed by 169 House
colleagues urging the EPA to adjust ethanol levels.
“While the EPA’s slight reduction of the RFS for 2014
acknowledges that the mandate is unworkable, it is not enough to provide the
much-needed relief businesses, farmers, and consumers need,” Goodlatte said.
“The announcement makes it even clearer that it will now be
up to Congress to fix this broken mandate. There is a growing appetite in
Congress to reform the ethanol mandate, and I urge Chairman Upton and the House
Energy and Commerce Committee to consider the RFS Reform Act as a legislative
fix to the growing problems with the RFS.”