On June 21, 2023, the US Environmental Protection Agency (EPA) finalized Renewable Volume Obligations (RVOs) for the 2023-2025 Renewable Fuel Standard (RFS) compliance years, including restoring the final 250 million (US) gallons (≈ 946.25 million litres) in remanded volume by the DC Circuit Court in 2017.
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The 2023-2025 Renewable Fuel Standard volumes finalized by the EPA mark an “unfortunate step backward” from the volumes that were originally proposed, according to the Renewable Fuels Association (RFA).
EPA’s final rule includes a total volume obligation of 20.94 billion gallons (≈ 75.7 billion litres) for 2023, of which 15 billion gallons (≈56.78 billion litres) will come from conventional renewable fuels like corn ethanol down from the proposed volumes of 15.25 billion gallons (≈ 57.73 billion litres).
The rule also includes a supplemental volume requirement for 250 million gallons (≈ 946.25 million litres) in 2023 to make up for illegally waived volumes in 2016.
EPA finalized total volumes of 21.54 billion (≈ 81.53 billion litres) and 22.33 billion gallons (≈ 84.52 billion litres) in 2024 and 2025, respectively, with conventional renewable fuel requirements of 15 billion gallons (≈56.78 billion litres) for each of those two years.
Disappointment over the role of ethanol
RFA called the reductions “inexplicable and unwarranted.”
The RFS was intended to drive continual growth in all categories of renewable fuels well beyond 2022; instead, today’s final rule flatlines conventional renewable fuels at 15 billion gallons and misses a valuable opportunity to accelerate the energy sector’s transition to low- and zero-carbon fuels. By removing half a billion gallons of lower-carbon, lower-cost fuel, today’s rule needlessly forfeits an opportunity to further enhance U.S. energy security and provide more affordable options at the pump for American drivers, said Geoff Cooper, President and CEO of RFA.
Despite the rule’s failure to finalize the strong proposed conventional renewable fuel volumes, the action “includes solid volumes for other renewable fuel categories and brings some stability and predictability to the marketplace for the next two and a half years.
Despite the disappointing reduction in conventional renewable fuel numbers, we appreciate the fact that President Biden and EPA Administrator Michael Regan have continued to prioritize renewable fuels in our nation’s energy and climate strategy, Geoff Cooper said.
Welcome deferral on eRINs
RFA also welcomed EPA’s announcement that it would not implement Renewable Identification Numbers (RINs) for electricity (eRINs) as part of the final rule.
As it noted in oral testimony and written comments to EPA, the agency’s initial proposal for incorporating eRINs into the RFS was overly complex and inconsistent with RIN generation provisions for all other renewable fuels.
RFA joined several other stakeholder groups in encouraging EPA to reconsider its eRIN proposal and take more time to get it right.
We appreciate that EPA was responsive to the many questions and concerns raised by numerous stakeholders regarding eRINs, and we believe the agency did the right thing by calling a timeout on implementation of those provisions. We look forward to continuing to engage with EPA on the best methods for bringing renewable electricity into the RFS program, Geoff Cooper said.
Cause to remain vigilant
American Coalition for Ethanol (ACE) CEO Brian Jennings was of a similar sentiment.
If EPA’s goal with the Renewable Fuel Standard is to maximize reductions in greenhouse gas (GHG) emissions from the transportation sector, today’s final rule falls short by arbitrarily limiting conventional biofuel use to 15 billion gallons in 2024 and 2025 compared to the Agency’s proposal of 15.25 billion gallons for each of those years. Higher blending targets would enable fuels such as E15 and E85 to quickly displace carbon pollution from gasoline, but EPA’s proposal will rein in those opportunities. We are supportive of finalizing the 250-million-gallon remedy as a supplemental requirement for 2023 and agree with removing the controversial eRIN proposal from the final rule, Brian Jennings said.
ACE’s experience with EPA’s oversight of the RFS over time requires us to remain vigilant to ensure mismanagement or unwarranted waivers are not used to undermine the physical blending of ethanol that has required litigation to rectify in previous years. We will also continue to press the Agency to once and for all update its antiquated greenhouse gas (GHG) model assumptions about corn ethanol. We continue to urge EPA to follow the science and adopt the latest GREET model for its lifecycle modeling, consistent with what Congress required of Treasury in the Inflation Reduction Act 45Z clean fuel production tax credit, said Brian Jennings.
Boost for biogas
The American Biogas Council (ABC) applauds the EPA’s final SET Rule for the RFS Program, which ABC notes, shows “significant support” for the biogas industry.
With EPA’s Final SET Rule, biogas systems will serve a foundational role in the future growth of the renewable transportation fuel industry, reducing methane emissions, and increasing food waste recycling, said Patrick Serfass, Executive Director of the American Biogas Council.
Related to biogas, the final rule includes the renewable fuel volumes for 2023, 2024, and 2025, including renewable natural gas (RNG), guidelines for biogas reform and biointermediates, and a new methodology for biogas systems that accept food waste in addition to agricultural waste or wastewater sludge.
According to ABC,
- RIN values will be strengthened and stabilized with EPA’s recognition of the strong, 20-40 percent RNG market growth the industry is experiencing today;
- new markets will open related to the RFS with biogas now able to replace conventional natural gas to produce non-RNG transportation fuels like ethanol, gasoline, and diesel;
- small farms will find it easier to build biogas systems to produce RNG by recycling food waste on-site; and
- the RFS will now help close the gap between federal policy on food waste and the more developed, state-based food waste recycling laws.
All of this will help the biogas industry scale and achieve greater environmental protection. We look forward to working with the Biden Administration and EPA to recognize biogas systems’ contribution to electric vehicles through electricity and fuel cells, and their complementary role in decarbonizing the transportation sector. The biogas and finance industries have already shown they’re ready to act, based on the reaction to the proposed SET Rule. Now, it’s up to the Administration to finish what Congress created and allow biogas-electricity systems to modernize and continue to decrease the carbon footprint of US transportation, Patrick Serfass said.
