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Final RFS rule provides only minimal growth for biodiesel, NBB says

Responding to the US Environmental Protection Agency's final Renewable Fuel Standards for 2019 and biomass-based diesel volume for 2020, the National Biodiesel Board (NBB) criticised the EPA's failure to properly account for small refinery exemptions that NBB says "will continue to destroy" biodiesel demand.

On November 30, 2018, the US Environmental Protection Agency (EPA) released its final Renewable Fuel Standard for 2019 and biomass-based diesel volume for 2020. The EPA sets the advanced biofuel and biomass-based diesel volumes lower than what the agency acknowledges will be produced. Moreover, the rule leaves open a backdoor to retroactively reduce required volumes through hardship exemptions.

Representing the entire biodiesel value chain, including producers, feedstock suppliers, and fuel distributors, as well as the US renewable diesel industry, the National Biodiesel Board (NBB) notes that the EPA made very few changes from its June proposal, setting the 2020 biomass-based diesel volume at 2.43 billion (US) gallons (≈ 9.2 billion litres) and the 2019 advanced biofuel renewable volume obligation (RVO) at 4.92 billion gallons (≈ 18.6 billion litres).

The biomass-based diesel RVO for 2019 was set at 2.1 billion gallons (≈ 7.9 billion) in last year’s rule. EPA used its cellulosic waiver authority to make the maximum possible reductions to the advanced biofuel and overall renewable fuel categories.

EPA recognizes that the biodiesel and renewable diesel industry is producing fuel well above the annual volumes. The industry regularly fills 90 percent of the annual advanced biofuel requirement. Nevertheless, the agency continues to use its maximum waiver authority to set advanced biofuel requirements below attainable levels. The method is inconsistent with the RFS program’s purpose, which is to drive growth in production and use of advanced biofuels such as biodiesel, said Donnell Rehagen, CEO, NBB.

In the final rule, EPA states that it has not received small refinery exemption petitions for 2019 and therefore estimates zero gallons of exempted fuel in its RVO formula. The agency has estimated zero gallons every year since 2015, even though it retroactively exempted more than 24.5 billion gallons (≈ 92.7 billion litres) of fuel between 2015 and 2017. The agency’s own data shows that the retroactive small refinery exemptions reduced demand for biodiesel by more than 300 million gallons (≈ 1.1 billion litres) in 2018.

EPA’s RFS rule fails to address the uncertainty associated with the unprecedented flood of small refiner hardship exemptions. Moreover, the agency still has not addressed the Court order in the ACE case, which remanded the agency’s improper waiver of the 2016 volumes. The rule that EPA has finalised for 2019 and 2020 is meaningless without solutions to these issues, said Kurt Kovarik, NBB Vice President of Federal Affairs.

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