May 20, 2024

Biofuel boosters: EPA blend targets not enough

WASHINGTON — Critics of the U.S. Environmental Protection Agency’s Renewable Fuel Standard three-year biofuel blending targets released June 21 say it doesn’t accurately reflect the industry’s expected growth and is below the corn-based ethanol mandate previously proposed.

For 2023, EPA set an implied 15.25-billion-gallon requirement for conventional corn-based ethanol, which includes a supplemental 250 million gallons a prior court decision required EPA to restore to the RFS.

For 2024 and 2025, EPA holds the implied conventional volume level at 15 billion gallons, despite proposing 15.25 billion gallons for those two years in December.

The total volumes for 2025 represent just over a 20% growth over the 2022 biomass-based diesel Renewable Volume Obligations previously set by EPA. Soybean oil is one of the sources used for BBD production.

However, these totals match current production levels and do not actually account for growth in the industry.

The Energy Information Administration predicts an increase in BBD production of over 800 million gallons in 2023 alone. The final rule offers RFS BBD volume increases of just 590 million gallons over the course of three years.

The final rule sets a total renewable fuel target of 20.94 billion gallons in 2023, 21.54 billion in 2024 and 22.33 billion in 2025.

Total renewable fuels were initially proposed at 20.82 billion gallons for 2023, 21.87 billion gallons for 2024 and 22.68 billion gallons for 2025.

Also of note, the EPA did not finalize a proposal to create a new program to generate RFS credits from automakers for electricity from renewable biomass referred to as e-RINs, renewable identification numbers.

Here’s what representatives from various organization said of the final rule:

“A multiyear RFS volume rule offers stability and certainty for renewable fuels. However, when it comes to addressing pressing energy, environmental and economic challenges, EPA’s final rule falls short of the emission reductions and cost-saving benefits the higher proposed ethanol volumes would have provided. NCGA and its members strongly urged EPA to separate its eRIN proposal from the RFS volumes because the proposal was wholly inconsistent with the way the RFS functions for other fuels and created an unlevel playing field across the RFS.”

Tom Haag, president

National Corn Growers Association

“This announcement is a letdown for soy growers. It threatens the success of the biomass-based diesel industry by significantly dialing back annual increases in volume obligations and failing to account for the progress being made in biofuels investment and growth. Farmers and biomass-based diesel producers face real, concerning consequences from low RFS volumes that do not reflect current production and demand, and we’re disappointed in this lack of support for the industry. EPA’s final rule undercuts these investments, and the market may not be able to absorb the expected future production. It’s also a huge, missed opportunity for a low-carbon fuel to reduce greenhouse gas emissions and scale back the country’s reliance on imported oil.”

Daryl Cates, Illinois farmer, president

American Soybean Association

“The EPA’s announcement establishes disappointing future volumes for the Renewable Fuel Standard, well below all expectations. It will delay the important opportunity for reducing greenhouse gas emissions from the use of low carbon biodiesel and renewable diesel fuels. Biodiesel and renewable diesel fuel deliver significant carbon reductions in every application right now. These fuels can be used in any new, or existing, diesel engine. They’re endorsed by engine and equipment makers. Trucking fleets, farmers, contractors, and others use these fuels as an affordable way to help reduce greenhouse gas and other emissions by up to 80%. That’s immediately and without investments in new infrastructure, vehicles, or equipment.”

Allen Schaeffer, executive director

Diesel Technology Forum

“We share EPA’s goal of reducing emissions in the transportation sector and are supportive of efforts to improve the RFS program to advance a lower carbon future. While we welcome EPA’s decision to omit the complex regulatory changes from eRINs, we are disappointed the agency did not do more to seize the opportunity to refocus the RFS to further incentivize lower carbon fuels. We look forward to continuing to work with EPA to build on this policy and ensure American consumers have access to the affordable and reliable fuels that they depend on every day while continuing to reduce emissions from transportation.”

Will Hupman, vice president of downstream policy

American Petroleum Institute

“This modest increase in advanced volumes is a step in the right direction for family farmers and the biofuels economy, but also a missed opportunity to further incentivize carbon reductions. Unfortunately, EPA did lower the conventional corn-based ethanol volumes and in doing so overlooked the benefits to consumers for lower priced, cleaner burning fuel.”

Rob Larew, president

National Farmers Union

“The RFS was intended to drive continual growth in all categories of renewable fuels well beyond 2022; instead, this 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, this rule needlessly forfeits an opportunity to further enhance U.S. energy security and provide more affordable options at the pump for American drivers. 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.”

Geoff Cooper, president and CEO

Renewable Fuels Association

“The RFS remains one of America’s most successful clean energy policies, but, yet again, its full potential as a climate solution remains untapped. EPA’s decision to lower its ambitions for conventional biofuels runs counter to the direction set by Congress and will needlessly slow progress toward this administration’s climate goals. We should be expanding market opportunities for higher blends like E15, not leaving carbon reductions on the table. While the final rule offers a modest improvement in advanced volumes, EPA inexplicably failed to extend that recognition to conventional biofuels. The bioethanol industry has more than adequate supply to meet the higher volumes that were originally proposed in December 2022. Choosing not to put that supply to good use in decarbonizing the transportation sector runs counter to this administration’s previously-stated commitments and undermines the goal of reaching net-zero by 2050.”

Emily Skor, CEO

Growth Energy

Tom Doran

Tom C. Doran

Field Editor