Explainer: Clashing concerns over biofuel blending

Published: Feb. 8, 2022 at 10:40 AM EST
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WASHINGTON (Gray DC) - The Environmental Protection Agency is considering updating biofuel blending requirements. This comes as gas prices are rising sharply and the Biden administration continues to push its clean energy agenda.

The Renewable Fuel Standard program requires that gas sold in the U.S is blended with a minimum amount of renewable fuel, such as ethanol or biodiesel.

Congress created the RFS in 2005 to reduce greenhouse gas emissions and U.S reliance on imported oil. It was expanded and extended by the Energy Independence and Security Act of 2007 (EISA) in 2007.

The number was set to increase each year, reaching up to 36 billion gallons in 2022.

Renewable Fuel Standards
Renewable Fuel Standards(EPA)

The EPA is now proposing to lower the 2022 standard to around 20 billion gallons, while also retroactively scaling back the requirements for 2020 and 2021.

Proposed Volume Requirements for 2020-2022 (billion gallons)*:

Cellulosic Biofuel0.510.620.77
Biomass-Based Diesel2.43**2.43**2.76
Advanced Biofuel4.635.205.77
Total Renewable Fuel17.1318.5220.77
Supplemenatal StandardN/AN/A0.25

*All values are ethanol-equivalent on an energy consult basis, except for biomass-based diesel (BBD), which is biodiesel-equivalent.

**The 2020 and 2021 BBD volumes were established in previous RFS annual rule-makings.

The EPA updates volume requirements each year based on fuel availability.

On the subject of retroactive revisions, Renewable Fuel Association President and CEO Geoff Cooper said, “it has the impact of sort of kicking the can down the road.”

Cooper said that part of the proposal will give refiners an easy break; however, he does strongly the EPA’s plan for this year.

“We feel like that proposal would get the renewable fuel standard back on track by restoring the volumes to the levels intended by Congress,” added Cooper.

On the other hand, Frank Macchiarola, Senior Vice President of Policy, Economics and Regulatory Affairs with the American Petroleum Institute claimed the requirements are unattainably high. He wants the RFS to be repealed or modified, saying the program is a constraint on the fuel supply system.

“The goal should be this to continue to utilize the resources that we have here in the United States for transportation through liquid fuels,” said Macchiarola.

A bipartisan group of lawmakers from the Midwest has also weighed in on the debate. Sen. John Thune (R-S.D.) said the group is urging the EPA to maintain blending requirements for 2022 while eliminating the proposed retroactive volume obligations.

Industry officials expect a decision from the EPA within a few months.

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