EPA completes rule to boost renewable fuel requirements

July 4, 2022

he Environmental Protection Agency (EPA) has completed setting renewable fuel obligations for US refiners. The Biden administration released a final rule Jan. 3 setting US renewable fuel obligations for 2022 at higher levels than were proposed last year. EPA adjusted the rule’s retroactive requirements for 2020 and 2021 to reflect volumes actually produced.

EPA boosted the 2022 number through its projections of what should be achievable when combining domestic renewable fuel production with imports. “The volume requirements for 2022 are market-forcing, requiring a growth in renewable fuel volumes that we believe is achievable,” EPA said in the final rule.

EPA added that if the standard cannot be fully met with volumes of ethanol and other biofuels, it can be met through a drawdown of the carryover bank of renewable identification numbers (RINs), the system that allows refiners to purchase credits.

As for hardship exemptions for small refiners, all 69 pending requests will be denied, the agency said. It had warned in its proposed rule, when 65 requests were pending, that it would issue such a blanket exemption (OGJ Online, Dec. 8, 2021).

The total renewable fuel requirements by year in the final rule are 17.13 billion gal for 2020, 18.84 billion for 2021, and 20.88 billion for 2022 when a supplement is added to account for a court decision.

Costs, consumers

The American Fuel & Petrochemical Manufacturers (AFPM), representing US refiners, issued a statement welcoming that use of actual production volumes but lamenting the 2022 mandate.

The 2022 standard “is bewildering and contrary to the administration’s claims to be doing everything in their power to provide relief to consumers,” said AFPM president Chet Thompson. “Unachievable mandates will needlessly raise fuel production costs and further threaten the viability of US small refineries, both at the expense of consumers.”

Costs to consumers also were mentioned by the Renewable Fuels Association (RFA), representing ethanol producers. Current gasoline prices are high when compared to ethanol, RFA president Geoff Cooper said in a statement welcoming EPA’s action.

“In the last few days alone, wholesale ethanol prices have been as much as $1.30 per gallon lower than gasoline, leading to significant savings at the pump for consumers of ethanol-blended fuels,” Cooper said.

Helping farmers

EPA, in announcing the final rule, repeatedly stressed the goal of reducing US reliance on oil and made only an oblique passing reference to climate change. The agency said its actions, along with an Agriculture Department decision to channel more federal funding to biofuels producers, “align with President Biden’s commitment to promoting and advancing biofuels to help rural America and our nation’s farmers.”

Helping farmers has been a central concern of both Democrats and Republicans for decades in their bipartisan support for renewable fuels mandates. Midwestern agricultural states can be swing states able to determine which party controls the White House and Congress.

Most US ethanol is made from corn, while most US renewable diesel is made from soybeans.

Prominent environmental groups, aware that the benefits of ethanol and biodiesel are doubted by many people within their own movement, usually are conspicuous by their silence on the renewable fuels mandates. This time around there was an exception.

The National Wildlife Federation urged the Environmental Protection Agency “to reconsider its decision due to the impacts it will have on food prices and availability, wildlife habitat, air and water quality, and the climate,” the group said June 3.

“We urge the administration to immediately begin charting a sustainable path forward for next-generation, sustainable biofuels and deploying resources to support habitat and communities adversely affected by the corn ethanol mandate,” said National Wildlife president Collin O’Mara.