EPA Proposes New RFS Standards to Mixed Reactions

WASHINGTON, D.C. – The U.S. Environmental Protection Agency (EPA) today proposed new standards regarding the levels of renewable fuels to be blended into gasoline and diesel in 2014 as required under the Renewable Fuel Standard (RFS). The proposal, which is being met with mixed reactions, calls for fewer gallons of renewable fuels to be blended into the nation’s fuel supply in 2014 than the law originally mandated.

According to the EPA, the new proposal was developed with the input of the U.S. Department of Energy and U.S. Department of Agriculture, and seeks to put the Renewable Fuel Standard on a steady path forward that ensures 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 includes a variety of approaches for setting the 2014 standards, along with multiple production and consumption ranges for key categories of biofuel covered by the RFS program. As for the total renewable fuel volume for 2014, the EPA is proposing the level be set at 15.21 billion gallons. More specifically:

• Renewable fuel – proposed volume: 15.21 billion gallons; range: 15 billion to 15.52 billion gallons.
   
• Cellulosic biofuel – proposed volume: 17 million gallons; range: 8 billion to 30 million gallons.
   
• Biomass-based diesel – proposed volume: 1.28 billion gallons; range: 1.28 billion gallons.
   
• Advanced biofuel – proposed volume: 2.20 billion gallons; Range: 2 billion to 2.51 billion gallons

More information on the standards can be found here on the EPA's website.

Once the proposal is published in the Federal Register, it will be open for a 60-day public comment period.

In a separate action, the EPA is seeking comment on petitions for a waiver of the Renewable Fuel Standard that would apply in 2014. The agency expects that a determination on the substance of these petitions will be issued at the same time that the EPA issues a final rule establishing the 2014 RFS standards.

AAA released a statement praising the new proposed standards.

"The EPA's proposal to decrease ethanol requirements will help drivers by preventing a surge in gas prices or the premature expansion of E15 gasoline sales. While we would like to increase the use of alternative fuels, it is a plain fact that the Renewable Fuel Standard's original targets are unreachable without putting motorists and their vehicles at risk," said AAA President and CEO Bob Darbelnet. "The EPA has finally put consumers first. Their proposal will support the continued development of alternative fuels, while also recognizing the needs of the millions of people that drive every day."

Darbelnet also stated that the "vast majority" of cars on the road today are not designed to run on gasoline that contains more than 10 percent ethanol, and added that while ethanol has the potential to support the economy and reduce reliance on fossil fuels, it is "irresponsible" to mandate more ethanol than can be safely used by cars.

Meanwhile, the biodiesel industry expressed disappointment with the proposal. The National Biodiesel Board (NBB) issued a statement warning that the proposed 2014 volumes would cause plant closures and layoffs in the United States.

"The growth in domestic biodiesel production dovetails exactly with President Obama's statement in July of this year that 'biofuels are already reducing our dependence on oil, cutting pollution and creating jobs around the country,'" said Anne Steckel, NBB's vice president of federal affairs. "This is why EPA's action today is so surprising and disappointing."

Steckel noted that if the proposal becomes final, it would create a shrinking market, eliminate thousands of jobs, likely cause biodiesel plants to close and send a signal to investors and entrepreneurs that would jeopardize the nation's future development of biofuels.

"This Administration has, for years, supported strong renewable fuels policies and encouraged investment in this industry," Steckel said. "The private sector has responded to these policies by meeting or exceeding the Advanced Biofuels requirements in every year of the RFS. The Administration should be celebrating that success and continuing the momentum, not retreating."