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EPA Proposes 2014 Renewable Fuel Standards: Industry Reacts

EPA Proposes 2014 Renewable Fuel Standards: Industry Reacts

18 November 2013

ANALYSIS - The US Environmental Protection Agency (EPA) has proposed for public comment the levels of renewable fuels to be blended into gasoline and diesel as required by Congress under the Energy Independence and Security Act of 2007.

The proposal seeks to put the Renewable Fuel Standard (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.”

“Biofuels are a key part of the Obama Administration’s “all of the above” energy strategy, helping to reduce our dependence on foreign oil, cut carbon pollution and create jobs,” said EPA Administrator Gina McCarthy.

“We have made great progress in recent years, and EPA continues to support the RFS goal of increasing biofuel production and use. We look forward to working with all stakeholders to develop a final rule that maintains the strength and promise of the RFS program.”

The proposal discusses a variety of approaches for setting the 2014 standards, and includes a number of production and consumption ranges for key categories of biofuel covered by the RFS program.

The proposal seeks comment on a range of total renewable fuel volumes for 2014 and proposes a level within that range of 15.21 billion gallons. Specifically, EPA is seeking comment on the following proposed volumes:

Nearly all gasoline sold in the US is now “E10,” which is fuel with up to 10 per cent ethanol. 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.

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.

'Long-term Approach'

Responding to the EPA's announcement, Agriculture Secretary Tom Vilsack said: "The Obama Administration remains committed to the production of clean, renewable energy from homegrown sources, and to the businesses that are hard at work to create the next generation of biofuels.

"It's important to take a long-term approach to the RFS. Clearly, as Governor of Iowa and as US Secretary of Agriculture, my support for the RFS has been steady and strong. But I also believe that improved distribution and increased consumer use of renewable fuels are critical to the future of this industry.

"We are proud of our record to support increased demand for renewable fuels. USDA has invested in the creation of advanced biorefineries across the nation; developed a unique partnership with the US Navy and Department of Energy to create new biofuels for marine and aviation use; and boosted markets for nearly 3,000 US companies that are creating biobased products from homegrown materials.

"I am pleased that EPA is requesting comments on how we can help the biofuels industry expand the availability of high-ethanol blends, and I hope the industry uses the comment period to provide constructive suggestions. Together, we will be able to chart a path forward that maintains President Obama’s strong commitment to an “All of the Above” energy strategy for our nation.”

National Farmers Union 'deeply disappointed'

National Farmers Union (NFU) President Roger Johnson added: “We are deeply disappointed in EPA’s apparent willingness to reduce total renewable fuel requirements based on the oil industry’s fictitious ‘blend wall’ argument. Big oil has determined that biofuels are taking their market share, so they have prevented increased amounts of biofuel to be sold at gas stations.

“At a time when advanced and cellulosic biofuel plants are just starting to come online, the EPA is sending a negative signal which will stifle investment in this nascent industry.

“Lowering renewable fuel targets below that which can be produced and below what is already being produced will sink corn prices, kill jobs and damage rural economies.

“The administration needs to stay true to its word that it will tackle climate change. The RFS is America’s only real climate change policy, and biofuels reduce greenhouse gas emissions by over 30 per cent compared to regular gasoline.

“We look forward to commenting on the proposed targets and EPA’s flawed methodology so that we can continue to support the biofuels industry.”

In a separate action, EPA is also 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 EPA 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.

More information on the standards and regulations can be found here.

Gemma Hyland, Editor

Gemma Hyland, Editor



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