EPA proposes biofuel blending volumes

WASHINGTON — The U.S. Environmental Protection Agency’s proposed biofuel blending volumes for 2020, 2021 and 2022 drew a mixed bag of reactions from biofuel proponents and the oil industry.

The agency, under the Renewable Fuel Standard, proposed an increase in the total biofuel blending requirement for 2022 of 22.77 billion gallons, which allows for an implied ethanol volume of 15 billion gallons.

EPA also proposed to add 250 million gallons in response to a 2017 court decision, with the remainder of that 500-million-gallon court remand pledged to come in next year’s rulemaking. This would address the 2014-2016 annual rule by Court of Appeals in Americans for Clean Energy vs. EPA.

The proposal includes a total renewable fuel volume of 18.52 billion gallons for 2021 based on projected use this year and a 2.96 billion gallon reduction from the previous final 2020 volume requirement, the first time EPA has proposed a retroactive RFS volume reduction. The revised 2020 volume is attributed to the challenges the program and the market faced that year, including from the pandemic.

In addition, EPA proposed denial of the 65 pending RFS refinery waiver petitions.

The U.S. Department of Agriculture separately released $700 million in COVID assistance funding for biofuel producers that Congress approved last year and committed an additional $100 million to support infrastructure for higher biofuel blends.

“Despite multiple challenging dynamics affecting the RFS program in recent years, EPA remains committed to the growth of biofuels in America as a critical strategy to secure a clean, zero-carbon energy future,” said EPA Administrator Michael Regan.

“This package of actions will enable us to get the RFS program back in growth mode by setting ambitious levels for 2022 and by reinforcing the foundation of the program so that it’s rooted in science and the law.”

Here’s what others are saying about the proposals.

“Because low-carbon ethanol replaces high-carbon gasoline and cuts emissions from vehicles, the proposed volumes for 2022 would help the Biden administration meet emission reduction commitments and lower fuel prices. Denying pending refinery exemption petitions and restoring gallons improperly waived in the past are important steps toward restoring RFS integrity. These actions help move renewable fuels forward. However, reopening 2020 volumes is unprecedented and rewards the use of more oil at the expense of the environment. We strongly urge EPA to move forward with finalizing the strong 2022 volumes while correcting course on the proposed retroactive cuts.”

Chris Edgington, president

National Corn Growers Association

“We are appreciative that EPA has released its decision on these numbers that are critical to implementation of the Renewable Fuel Standard, but of course we would have liked to have seen higher retroactive numbers for 2020 and 2021. And we would like to have the 2023 volume announcement that was due the end of November. We are heartened, however, by the 2022 RVO and hope 2023 remains on that upward trajectory.”

Kevin Scott, president

American Soybean Association

“EPA’s announcement upholds the integrity of the RFS by setting a positive target for 2022 Renewable Volume Obligations of 20.77 billion gallons of blending and saying no to all 65 pending small refinery exemptions, which have undermined renewable fuel production in the past. We’re also pleased USDA will finally be allocating $700 million in pandemic assistance for losses related to biofuel production. The use of ethanol and biodiesel have reduced greenhouse gas emissions the equivalent of taking 18 million cars off the road per year. Support for biofuels simply makes sense. We look forward to working with EPA and USDA as they carry out today’s announcements and in future efforts to support biofuels and their benefits for all Americans.”

Zippy Duvall, president

American Farm Bureau Federation

“We commend EPA Administrator Michael Regan and the Biden administration for denying all pending small refinery exemptions, and we are extremely pleased to see the agency shutting the floodgates on these destructive waivers. Under the previous administration, these exemptions destroyed demand for more than 4 billion gallons of renewable fuel, resulting in higher fuel prices for the consumer, increased GHG emissions and lower farm income. This announcement should finally put an end to the rampant abuse of the exemption program that we experienced under the last administration. Unfortunately, this package also seeks to cut the 2021 conventional renewable fuel requirement to just 13.32 billion gallons, representing EPA’s view of actual consumption. In addition, EPA is proposing to reopen the already-finalized 2020 RVO and reduce the requirement from the original volume of 15 billion gallons to just 12.5 billion gallons, again reflecting EPA’s estimate of actual consumption.”

Geoff Cooper, president and CEO

Renewable Fuels Association

“So much for the Biden administration being concerned about rising energy costs. The 2022 proposal would needlessly increase already record-breaking RFS compliance costs which, in turn, will raise the cost of producing gasoline and diesel for U.S. consumers. The RFS is broken and must be fixed. EPA’s proposal will make matters worse, depleting the RIN bank by ignoring fuel market realities, proposing an extra 500 million gallons over the next two years and inflating the advanced biofuel mandate — without concern for feedstock challenges or the capacity to produce those fuels here at home. Potentially making matters even worse is EPA’s plan to disregard the Supreme Court and eliminate Congress’ small refinery relief program. RFS compliance reached record highs amid the pandemic and are unsustainable. This proposal will make things worse for refiners and consumers alike.”

Chet Thompson, president and CEO

American Fuel and Petrochemical Manufacturers