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EPA Proposes Renewable Fuel Standard Program Changes, Cracks Down on RFS Violators

cornThe EPA this week proposed changes to the Renewable Fuel Standard that the agency says will support market growth of ethanol and other biofuels in the US.

The proposal would allow biofuel producers to partially process renewable feedstocks at one facility and further process them into renewable fuels at another facility. The agency says this “would increase the economics and efficiency for the production of biofuels, particularly advanced and cellulosic fuels that have the lower carbon footprints.”

It would also update fuel regulations to allow expanded availability of high ethanol fuel blends in flex fuel vehicles (FFVs) — these are vehicles that run on any gasoline-ethanol mixture of up to 85 percent ethanol, or E85.

The Renewable Fuels Association has been working with the EPA on the draft regulations. RFA president and CEO Bob Dinneen said the association is still reviewing the proposal and will be submitting comments to the agency.

“Our goal is to ensure the final regulations do not unreasonably impair the ability of blenders and retailers to offer ethanol flex fuels like E85 to consumers,” Dinneen said in an email. “Ethanol flex fuels are the lowest-cost, lowest-carbon, and highest octane liquid fuels on the market, and it is imperative that these EPA regulations help — not hinder — broader commercial introduction of these fuels.”

Additionally, the proposal would approve new feedstocks for cellulosic biofuels including short-rotation poplar and willow trees, cellulosic diesel produced from co-processing cellulosic feedstocks with petroleum, and renewable diesel and biodiesel produced from non-cellulosic portions of separated food waste.

The public can comment on the proposal for 60 days followings its publication in the Federal Register.

Sabrina Fang, a spokesperson with the American Petroleum Institute, said API is currently reviewing the proposed changes to the Renewable Fuel Standard. “But the RFS program is broken and the last thing we need is more complexity by expanding scope and scale of the RFS,” she said in an email. “What EPA should be working on is a set of RFS volumes that reflects market realities until Congress repeals or significantly reforms this dysfunctional program.”

The oil industry has been urging Congress to repeal the biofuels mandate for years and earlier this year filed lawsuits challenging the program.

In May the EPA announced the proposed 2017 Renewable Fuel Standard volume requirements, which would require refineries to blend 18.8 billion gallons of biofuels into the nation’s gasoline supply next year. Of this amount, 14.8 billion gallons would come from conventional corn-based ethanol.

API and the oil industry say the 2017 proposed biofuel volumes aren’t safe for cars on the road and will raise gas prices at the pump, which are on the low end of there they have been in recent years.

The biofuels industry and corn farmers, on the other hand, say the 2017 proposed biofuel volumes aren’t aggressive enough and have accused the EPA of caving to big oil in setting the volumes.

Brent Erickson, EVP of biotech trade association Biotechnology Innovation Organization (BIO), says the EPA’s latest proposed changes to the Renewable Fuel Standard will boost the biofuels industry.

“We are looking forward to working with EPA on the proposed feedstock and biointermediate pathways as well as on the proposed ethanol flex fuel rules, which will clarify regulations for retailers who install blender pumps and help grow the market for advanced biofuels,” Erickson said in an email.

Also this week the EPA and US Department of Justice filed a complaint against two companies that the agencies say violated the Renewable Fuel Standard.

The complaint against NGL Crude Logistics and Western Dubuque Biodiesel alleges that NGL entered into a series of transactions with Western Dubuque in 2011 that resulted in the generation of approximately 36 million invalid renewable identification numbers, or RINs. RINs are credits created when a company produces qualifying renewable fuel and can be traded or sold to refineries and importers to use for compliance with renewable fuel production requirements.

The federal agencies also announced a settlement with Western Dubuque in which the company agreed to pay $6 million after generating RINs for renewable fuel that was produced using unapproved feedstocks and production processes.

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One thought on “EPA Proposes Renewable Fuel Standard Program Changes, Cracks Down on RFS Violators

  1. Gevo Inc. (still only .50c/share, GEVO: Nasdaq), maker renewable isobutanol, may be the next Exxon.
    Stock still affordable,…at the moment. By the end of next week, it may not be.

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