EPA proposes updates, improvements to biofuels program

The U.S. Environmental Protection Agency (EPA) released a proposed rule Dec. 7 to revise 2020 Renewable Fuel Standard (RFS) volume obligations and introduce regulatory changes intended to “enhance the program’s objectives.”

In addition, the EPA will be seeking public comment on a proposed decision to deny more than 60 exemption petitions from small refineries.

EPA Administrator Michael S. Regan says, “Despite multiple challenging dynamics affecting the RFS program in recent years, EPA remains committed to the growth of biofuels in America as a critical strategy to secure a clean, zero-carbon energy future. This package of actions will enable us to get the RFS program back in growth mode by setting ambitious levels for 2022 and by reinforcing the foundation of the program so that it’s rooted in science and the law.”

For 2022, the EPA is proposing the highest total volumes in history—which are more than 3.5 billion gallons higher than the volume of renewable fuel used in 2020.

The proposed renewable fuel obligation (RVO) of advanced biofuel for 2022 is over 1 billion gallons greater than the volume used in 2020. EPA also is proposing to add a 250-million-gallon “supplemental obligation” to the volumes proposed for 2022 and stating its intent to add another 250 million gallons in 2023. The EPA says this would address the remand of the 2014-2016 annual rule by the DC Circuit Court of Appeals in Americans for Clean Energy v. EPA.

The EPA is proposing 2021 volumes at the level that it projects the market will use by the end of the year. In addition, the EPA has suggested revising the 2020 standards to account for challenges the program and the market faced that year, including from the COVID-19 pandemic.

Proposed Volume Requirements for 2020-2022 (billion gallons)

This action also proposes a regulatory framework to allow biointermediates to be included in the RFS program while ensuring environmental and programmatic safeguards are in place.

By providing producers a way to utilize biointermediates—a feedstock that has been partially converted at one facility but is then sent to a separate facility for final processing into an RFS-qualified biofuel—the EPA forecasts a potential to reduce biofuel production costs and expand opportunities for more cost-effective biomass-based diesel, advanced and cellulosic biofuels.

Following the release of the EPA’s proposed volume standards, several renewable fuel associations and boards have criticized the notion.

Patrick Serfass, executive director for the American Biogas Council, states, “We appreciate EPA’s recognition of 20-25 percent annual growth in the D3/cellulosic category, 95 percent of which is renewable natural gas made from biogas. However, we have observed actual industry growth this year that is two times higher. We, therefore, encourage EPA to revise these cellulosic volumes upward in the final rule.

“In addition, we continue to be extremely disappointed that EPA has again failed to recognize renewable electricity from biogas in its volumes, for now, the seventh year in a row. We implore EPA to take action quickly to approve the dozens of projects already registered and again revise the RVO for cellulosic biofuel upward to recognize this additional renewable fuel production for battery and fuel cell electric vehicles.”

The Renewable Fuels Association (RFA), on the other hand, found fault with the EPA’s proposal to reduce 2020 RVOs. However, the association also stressed that the proposed 2021 and 2022 RVOs, along with the proposed action to deny more than 60 small refinery exemption (SRE) petitions, are a step in the right direction.

“Over the past four years, RFA has led the charge to stop the previous EPA’s illegal abuse of the small refinery waiver provision,” says Geoff Cooper, president and CEO of the RFA. “We commend EPA Administrator Michael Regan and the Biden administration for denying all pending small refinery exemptions, and we are extremely pleased to see the Agency shutting the floodgates on these destructive waivers. Under the previous administration, these exemptions destroyed demand for more than 4 billion gallons of renewable fuel, resulting in higher fuel prices for the consumer, increased GHG emissions, and lower farm income. Today’s announcement should finally put an end to the rampant abuse of the exemption program that we experienced under the last administration.”