The Fight for Renewable Fuel Standard Levels
In May 2015 the EPA proposed lower RFS volumes and the industry stood up and fought back
2015 year marked the 10th anniversary of the Renewable Fuel Standard (RFS), which was originally created under the Energy Policy Act of 2005. Its passage established the first renewable fuel volume mandate in the U.S., requiring 7.5 billion gallons of renewable fuel to be blended into gasoline by 2012.
Two years after its initial establishment, RFS was expanded when the Energy Independence and Security Act (EISA) of 2007 was signed into law with additions that furthered the foundation for reducing greenhouse gas emissions and imported petroleum as well as encouraging the development and expansion of the nation’s renewable fuels sector.
Most notably, EISA added diesel to the program and it increased the volume of renewable fuel to be blended into both diesel and gasoline from 9 billion gallons in 2008 to an ambitious 36 billion gallons by 2022. It also added new renewable fuel categories, setting separate volume requirements for each while requiring that all renewable fuels emit fewer greenhouse gases than the petroleum fuel they replace.
EPA administers the program and sets specific renewable fuel volume requirements and associated percentages, or renewable volume obligations (RVO), each year for cellulosic biofuel, biomass-based diesel, advanced biofuel, and total renewable fuel for gasoline and diesel. It bases those numbers on EISA-legislated volumes as well as fuel availability.
In recent years, ethanol produced from corn has been the largest contributor toward RFS requirements, although in the future, increasingly large amounts of advanced biofuels — which include diesel made from biomass, such as soybean oil or animal fat; ethanol made from sugarcane; and cellulosic biofuels made from converting the cellulose in plant materials into fuel — are mandated according to EISA.
Industry comes together
In May, EPA proposed RFS requirements for 2014, 2015 and 2016 which reflected a reduction in volumes from their statutory targets, including a decrease in corn ethanol’s volume by 3.75 billion gallons for 2014 to 2016. The announcement of a possible reduction to the volume in the RFS triggered a massive response for the industry.
To seek comment, EPA hosted a public hearing in June to provide interested parties the opportunity to present data, views and/or arguments concerning the proposal. More than 250 people registered to testify, including a number of NCGA and RFA members and representatives.
“By our count, 230 of those people opposed EPA’s proposal and spoke in support of the RFS as enacted by Congress,” noted Geoff Cooper, senior vice president, Renewable Fuels Association. “Most of those in support of the proposal were oil companies that don’t want to blend any more renewable fuel because that means they sell less gas. It’s an issue of market share.”
A large contingency of corn growers spoke as well, providing their perspective about the adverse impact the proposal would have on their farms and the agriculture community.
“One story I found interesting was from a young, female high school student,” mused Beth Elliott, director of public policy, National Corn Growers. “Because of RFS, she was able to return to the farm and continue her family’s tradition. Others spoke about what RFS does for the community, and how tractor manufacturers have had to lay off workers because of the uncertainly in RFS. There was a full spectrum of perspectives presented, with a lot of them in support of returning to the statutory levels. We would like EPA to get back to the statute.”
“A step forward”
In November 2015, the EPA published their final ruling for 2014, 2015 and 2016, along with the biomass-based diesel volume for 2017, and it seems the efforts of the industry paid off — at least in part. The EPA increased the volumes of renewable fuel in the final volume, though not to the levels the industry would have liked.
In a press release from the NCGA following the release of the final mixing requirements, thier president Chip Bowling stated, “While we are pleased to see the EPA take a step forward and revise its original proposal, the fact remains that any reduction in the statutory amount will have a negative impact on our economy, our energy security, and the environment. It is unfortunate that Big Oil’s campaign of misinformation continues to carry weight in the court of public opinion, and in this decision.
“The Renewable Fuel Standard has been one of America’s most successful energy policies ever. Because of it, our economy is stronger, we are more energy independent, and our air is cleaner. We should be strengthening our commitment to renewable fuels, not backing down.
“In light of the EPA’s decision, we are evaluating our options. We will fight to protect the rights of farmers and consumers and hold the EPA accountable.”