EPA finalizes 2013 biofuel quotas; to address E10 ‘blend wall’

The US Environmental Protection Agency announced final 2013 biofuel quotas under the Renewable Fuel Standard. It also said it will use authority it has under RFS to address concerns about a possible E10 “blend wall” when it proposes 2014 biofuel volume requirements.

EPA’s final 2013 overall volumes and standards require 16.55 billion gal of renewable fuels to be blended into the US fuel supply, creating a 9.74% percent blend. It specifically calls for 1.28 billion gal of biomass-based diesel fuel, 2.75 billion gal of advanced biofuels, and 6 million gal of cellulosic biofuels.

The final quotas reflect updated production projections, which EPA said it developed by extensively engaging with refiners and biofuels producers, and thoroughly assessing the biofuels market. It said it also is providing more compliance flexibility under the 2013 requirements by extending the deadline by 4 months to June 30, 2014.

Refiners have warned for several months that they potentially would not be able to meet 2014 ethanol volume requirements because total sales of gasoline with a 10% ethanol blend have been dropping due to higher prices. EPA acknowledged that most of the gasoline sold in the US is E10, and said it would use authority under the RFS to reduce both the advanced biofuel and total renewable volumes in the forthcoming 2014 volume requirement proposal.

Fuel ethanol advocates have responded that the blend wall is self-inflicted because refiners won’t permit more ethanol in gasoline. Refiners, marketers, and engine manufacturers have said higher blend levels have not been adequately tested and could damage engines.

'Missed opportunity'

American Petroleum Institute President Jack N. Gerard said EPA missed a chance to fix the blend wall problem sooner. “While the administration acknowledges that higher ethanol mandates are unworkable by suggesting a new approach for the 2014 standards, EPA missed an opportunity to fix the problem this year,” he said on Aug. 6.

“Now it’s up to Congress to exercise leadership and move quickly to end this dangerous mandate before it hurts consumers, damages vehicles, and harms our economy,” Gerard maintained.

American Fuel & Petrochemical Manufacturers Pres. Charles T. Drevna also was encouraged by EPA’s recognizes the need to address the blend wall problem as it develops the 2014 requirements, and expressed hope that it would act soon to bring long-term stability to the biofuels market.

“In acknowledging the blend wall, EPA joins a growing list of organizations that understand the fundamental flaws associated with our nation's ill-crafted biofuel mandate,” Drevna said, adding, “Congress now needs to start working on repealing this poorly devised mandate as soon as possible to stop what will become a growing drain on the US economy.”

Brooke Coleman, executive director of the Advanced Ethanol Council, said EPA clearly did its homework in establishing the final 2013 requirements. “The commercial cellulosic biofuel facilities that [it] projected to start up in 2013 are indeed operating, and the adjusted targets reflect the number of actual gallons expected to be available through the end of the year,” she said.

Contact Nick Snow at nicks@pennwell.com.

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