On May 18 the US Environmental Protection Agency (EPA) released its draft renewable volume obligations (RVOs) for 2017 with increases in requirements across all biofuel types under Renewable Fuel Standard (RFS) programme.
The RFS – a bipartisan policy passed in 2005 and signed into law by President George W. Bush – requires increasing volumes of renewable transportation fuels in the US fuel stream. According to EPA the proposed increases for 2017, almost 700 million gallons in total, would “boost production and provide for ambitious yet achievable” growth.
The proposed volume requirements and associated percentage standards are for calendar year 2017 for cellulosic biofuel, biomass-based diesel, advanced biofuel, and total renewable fuel. EPA also proposed the volume requirement for biomass-based diesel for 2018. EPA proposed a total renewable fuel volume of 18.8 billion gallons (BG) for 2017 up 690 million gallons from 2016. Of the total proposed volume 4 BG is advanced biofuel and 312 million gallons is cellulosic biofuel leaving a 14.48 BG requirement for conventional renewable fuels such as corn ethanol.
The Renewable Fuels Association (RFA), a leading trade association for US ethanol producers, has consistently called on EPA to follow congressional intent by increasing blending targets, and is currently involved in litigation on the final 2014–2016 targets.
– EPA can be given credit for two things–getting the proposal out in a timely fashion and at least coming within a mere 200 million gallons of the statutory level of 15 billion gallons for conventional biofuels. The real frustration is that EPA seems to be artificially constraining this market, said Bob Dinneen, RFA President and CEO. According to Dineen the RFA has demonstrated how easy it would be for obligated parties to reach the 15 billion gallon statutory volume for conventional biofuels next year.
– With rising gasoline demand, increased E15 and E85 use made possible by USDA’s infrastructure grant program, continued use of renewable diesel and conventional biodiesel that also generate D6 RINs (renewable identification numbers), well more than 15 billion gallons will be used next year. All of that is in addition to the 2 billion surplus RINs available to refiners due to EPA’s tepid enforcement of the RFS in the past, Dinneen said.
Biodiesel growth potential understated
For biodiesel EPA’s proposal is for 2.1 BG in 2018 with 2017 already pegged at 2 BG. Biodiesel falls under the “Biomass-based Diesel” category, intended to ensure that the RFS also addresses the diesel fuel market, not just gasoline. The Biomass-based Diesel category is filled by both biodiesel and renewable diesel. Commenting on the proposed 100 million gallon increase Anne Steckel, Vice President of Federal Affairs, National Biodiesel Board (NBB), a US trade association representing both biodiesel and renewable diesel producer said that it the proposal “significantly understates the amount of biodiesel this industry can sustainably deliver” to the market.
– We have plenty of feedstock and production capacity to exceed 2.5 billion gallons today, and can certainly do so in 2018, said Steckel.
Good for cellulosic
The 312 million gallons volume proposed for cellulosic biofuels was welcomed by the Advanced Biofuels Association (ABFA).
– The proposed RFS rule for 2017 is good news for the advanced biofuels industry with increases to the advanced, biomass-based diesel, and cellulosic pools. This shows great progress for the advanced biofuels sector, said Michael McAdams, President of ABFA.