The EPA has issued a final rule establishing the biofuel volume requirements for 2023 to 2025.
The final rule, issued under the renewable fuel standard (RFS) program, aims to reduce U.S. reliance on foreign sources of oil by roughly 130,000 to 140,000 barrels of oil per day between 2023 and 2025. The EPA touted the requirements as beneficial to U.S. energy security.
The final rule, known as the Set Rule, establishes the biofuel volume requirements and associated percentage standards for cellulosic biofuel, biomass-based diesel, advanced biofuel, and total renewable fuel for 2023–2025. In addition, the Set Rule touches on how the EPA will implement the RFS program and its impacts on domestic refineries. Plus the rule includes a supplemental volume requirement of 250 million gallons of renewable fuel for 2023 stemming from a court remand of the 2016 annual rule, the EPA stated.
“From day one, EPA has been committed to the growth of renewable fuels that play a critical role in diversifying our country’s energy mix and combating climate change, all while providing good paying jobs and economic benefits to communities across the country,” EPA Administrator Michael S. Regan said in a statement. “Today’s final rule reflects our efforts to ensure stability of the program for years to come, protect consumers from high fuel costs, strengthen the rural economy, support domestic production of cleaner fuels, and help reduce greenhouse gas emissions.”
For the three-year period in the Set Rule, biofuels will see steady growth for use in the nation’s fuel supply. The EPA has issued final biofuel volume targets for all categories under the “set” authority provided by the Clean Air Act, as the Energy Independence and Security Act (EISA) of 2007 did not specify statutory volumes after 2022.
See the final volume targets for fuel types between 2023 and 2025 below:
The EPA said it considered a number of factors in determining the volumes for years after 2022, including costs, air quality, climate change, implementation of the program to date, energy security, infrastructure issues, commodity prices, water quality, and supply.
Industry group The Diesel Technology Forum slammed the volumes for biodiesel and renewable diesel fuel, stating “the EPA’s volume set for 2023 is misaligned with current conditions.”
“The EPA’s announcement establishes disappointing future volumes for the Renewable Fuel Standard, well below all expectations,” Diesel Technology Forum Allen Schaeffer said in a statement. “It will delay the important opportunity for reducing greenhouse gas emissions from the use of low carbon biodiesel and renewable diesel fuels.”
According to the EPA, the reduction in oil imports has an anticipated value of the energy security benefits to the U.S. economy, ranging from $173 million to $192 million per year from 2023-2025. The agency also stated the target fuel volumes reflect a “robust” engagement strategy and comments from industry stakeholders. More regulatory changes are being finalized to expand the use of biogas under the program and improve the operation of the RFS program overall.
To ensure implementation of the RFS program, the EPA will meet with the Commodity Futures Trading Commission (CFTC) – which is tasked with promoting the integrity, resilience, and vibrancy of the U.S. derivatives markets through regulation – within 45 days to review “existing agreements between EPA and CFTC are sufficient to monitor renewable identification numbers trades for potential market manipulation.”
Plus, the EPA will monitor in real-time a set of market indicators, such as costs to consumers of transportation fuel, stability of fuel supplies, and domestic refining assets.