EPA Biofuels Proposals Reaction

Cindy Zimmerman

Biofuel supporters are having mixed reactions to the two proposals released this week by the Environmental Protection Agency related to the Renewable Fuel Standard.

On the good side, EPA proposed to deny 65 pending small refinery exemption (SRE) petitions based on the Tenth Circuit court decision in Renewable Fuels Association et al. v. EPA.

However, the proposed package setting Renewable Volume Obligations for three years, including resetting the already approved 2020 level, is getting less favorable reviews. “While we are pleased to see that EPA’s proposal for 2022 is consistent with Congressional intent to require 15 billion gallons of conventional renewable fuels like corn ethanol, it would be completely unprecedented and contrary to EPA’s past policies and practices for the agency to go back in time and revise the 2020 RFS requirements. We don’t believe a retroactive reduction of this nature is legally permissible,” said Renewable Fuels Association president and CEO Geoff Cooper. (Listen to Cooper’s full reaction in The Ethanol Report podcast)

Not only is it potentially illegal, American Coalition for Ethanol (ACE) Senior Vice President Ron Lamberty says a retroactive reduction is unnecessary because it is already built into the law. “Each year’s volume is converted to a percentage, so renewable fuel volumes automatically rise or fall based on actual fuel sales. By reducing the 2020 percentage and 2021 volumes EPA is essentially shifting more of the pandemic burden from refiners to ethanol producers and farmers, and allowing gallons already sold to be counted against 2022 volumes, extending the pain into another year.”

The National Biodiesel Board is pleased that EPA’s proposal would increase 2022 advanced volumes and restore improperly waived volumes from prior years. However, NBB Vice President for Federal Affairs Kurt Kovarik said, “EPA is setting a bad precedent by recalculating the 2020 obligations. The retroactive lowering of volumes creates uncertainty about future growth.”

In 2020, the U.S. biodiesel and renewable diesel market grew to 3 billion gallons – its highest volume ever – and generated more than 4.5 billion advanced biofuel credits (Renewable Identification Numbers or RINs). Through the first ten months of 2021, the industry maintained a sustainable production rate comparable to 2020. EPA is proposing sustainable growth opportunities consistent with industry expectations along with a statutorily required increase of 500 million gallons in the overall advanced biofuel category.

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