2022 Could Be Most Transformative Year Yet for Renewable Fuel Standard
WASHINGTON, D.C. — This year could be very important for the Renewable Fuel Standard (RFS), as the Biden Administration must make several decisions regarding the U.S. biofuel program. In 2022, the Environmental Protection Agency (EPA), which administers the RFS, will have to decide on the next phase of the program in coordination with the Department of Energy and the Department of Agriculture, reported Reuters. The EPA plans to propose requirements beginning in 2023 in May this year, with a final rule to come in December.
The RFS, created by Congress in 2005 and expanded in 2007, was designed to mandate certain volumes of renewable fuels to replace or reduce petroleum-based fuels. In a move that would boost the electric vehicle industry, the EPA is considering making electric vehicle power generation eligible for renewable fuel credits, a top official told Reuters.
Congress set yearly volume requirement targets of renewable fuel for the program through 2022. Currently, the proposed volume requirement for 2022 is about 21 billion gallons.
The RFS could be met with resistance based on what decisions the Biden Administration makes this year. Oil refiners, which are required to blend the billions of gallons of biofuels into their fuel mix, say the program is too costly and needs to be reined in, while corn farmers and biofuel producers like the standards, as they have helped to build a multi-billion-gallon market for their products, according to Reuters.
The Biden Administration is faced with the fact that gasoline costs for U.S. motorists rose to multi-year highs last year, with the potential for $4 per gallon of regular gas predicted for this year. Midterm elections in November could make the administration wary of hindering production of oil and petroleum-based fuel supplies, stated Reuters. However, the White House has set aggressive targets to reduce carbon dioxide emissions and fight climate change. The RFS could be a key tool in this fight going forward.
Corn farmers and biofuel producers want the EPA to raise required blending volumes of renewable fuels, Scott Irwin, professor of agricultural and consumer economics at the University of Illinois, told the news outlet.
Meanwhile, merchant refiners say the costs of the program are too high and threaten jobs and business at smaller refineries.
"The crude oil refining side wants to give a permanent haircut to the RFS so that basically growth in biofuels would have to be market-driven rather than driven by mandates," Irwin told Reuters.