The US Environmental Protection Agency issued its final 2020 quotas for renewable fuels and 2021 quotas for biomass-based diesel under the federal Renewable Fuel Standard. EPA is committed to assure that a net 15 billion gal of biofuel are blended in 2020, it said on Dec. 19.
“President [Donald] Trump committed to our nation’s farmers that biofuel requirements would be expanded in 2020,” EPA Administrator Andrew R. Wheeler said. “EPA is delivering on that promise and ensuring a net of 15 billion gal of conventional biofuel are blended into the nation’s fuel supply.”
EPA said that under the newest final rule, it has modified the RFS program by projecting small refinery relief to assure that final volumes are met, while adjudicating small refinery relief when appropriate.
“As proposed, we are finalizing a projection methodology based on the 2016-2018 annual average of exempted volumes had EPA strictly followed US Department of Energy recommendations of 770 million Renewable Identification Numbers (RINs) in those years, including granting 50% relief where DOE recommended it,” the federal environmental regulator explained.
“This is our general approach to adjudicating Small Refinery Exemption (SRE) petitions going forward, beginning with 2019 SRE petitions and including 2020 SRE petitions and beyond, we are committed to following the DOE recommendations. By proposing effectively 15.8 billion gal for 2020, we will ensure meeting our target of 15 billion gal,” it said.
Under the Dec. 19 action’s key elements, EPA said that:
Conventional biofuel volumes, primarily met by corn ethanol, will be maintained at the 15 billion gal target set by Congress for 2020.
Cellulosic biofuel volumes for 2020, and thus advanced biofuel volumes, will increase by almost 170 million gal over the 2019 quotas.
Biomass-based diesel volumes for 2021 will be equivalent to the 2020 quotas, but still be more than double the statutory requirement.
It will closely examine labeling requirements for motor fuel with a 15% ethanol blend (E15), and “move forward with clarifying requirements as needed.”
It will modify the way RFS obligations are determined to better ensure that these volumes are met, while still allowing for relief for small refineries consistent with the direction provided by Congress.
EPA added that in response to Trump’s earlier decision to allow year-round E15 sales, it will work to streamline labeling and remove other barriers nationwide. It also said that it is making important reforms to its Renewable Identification Number (RIN) compliance system to make it more transparent and to discourage price manipulation.
The agency also said that it will continue to engage with stakeholders to expand the number of approved fuel pathways and add diversity to the US biofuel mix.
“Since January 2017, EPA has approved 25 petitions for new fuel pathways, including a final rule in August 2018 that approved new pathways for biofuels derived from sorghum,” it noted. “EPA will continue to further explore opportunities to remove regulatory burdens that prevent marketplace entrance and growth to natural gas, flexible fuel vehicles, and E85 fuels.”
The Fueling American Jobs Coalition, which said it represents union workers, family retailers, and independent refiners, strongly criticized EPA’s approach.
“The entire concept of prospectively recovering small refiner exemption (SRE) volumes is based on a false premise. The overwhelming consensus of data, confirmed by this EPA, clearly demonstrates that SREs do not suppress US ethanol production, demand or exports,” it said in a statement.
“Year-to-date domestic ethanol blending levels are higher than ever, and the bulk of additional volumes will be satisfied by imports of foreign biofuel rather than US biofuels producers,” the group suggested.
“To be clear, neither the reallocations nor the partial waivers contained in today’s announcement are legal. Both threaten to raise the cost of compliance credits known as RINs, and refineries that have not requested exemptions will find themselves saddled with even higher volume requirements applied without due process. Court challenges will ensue,” it warned.
Nick Snow
NICK SNOW covered oil and gas in Washington for more than 30 years. He worked in several capacities for The Oil Daily and was founding editor of Petroleum Finance Week before joining OGJ as its Washington correspondent in September 2005 and becoming its full-time Washington editor in October 2007. He retired from OGJ in January 2020.