‘No rationale for further reducing’ 2018 RFS RVO, says RFA in response to EPA NODA
– There is no rationale for further lowering either the 2018 advanced biofuel volume requirement or the total renewable fuel volume. We see no statutory basis whatsoever for attempting to limit biofuel imports through the use of a general waiver, said Bob Dinneen President and CEO of Renewable Fuels Association (RFA) in response to the EPA Notice of Data Availability (NODA) on potential options for reductions in the biomass-based diesel, advanced biofuel and total renewable fuel volumes.
On September 26, the US Environmental Protection Agency (EPA) issued a Notice of Data Availability (NODA), seeking comment on potential options for reductions in the biomass-based diesel, advanced biofuel and total renewable fuel volumes beyond those already proposed in EPA’s recent 2018 Renewable Fuel Standard (RFS) Renewable Volume Obligation (RVO) proposed rule.
Among possible changes, EPA is requesting comment on a further reduction of the 2018 advanced biofuel volume requirement from the proposed level of 4.24 billion gallons to 3.77 billion gallons, and the 2018 total renewable fuel volume requirement from the proposed level of 19.24 billion gallons to 18.77 billion gallons, driven by apparent concerns over biofuel imports.
As we outlined in our recent public comments to EPA on the proposed 2018 RVO, we see no statutory basis whatsoever for attempting to limit biofuel imports through the use of a general waiver. It is also likely that using RFS waiver authorities in an attempt to limit exports would be perceived as a non-tariff trade barrier, which could run afoul of U.S. obligations under World Trade Organization (WTO) rules, said Dinneen.
Dinneen pointed out that there are a number of avenues outside of EPA’s jurisdiction and outside of the RFS to pursue recourse of biofuel trade barriers and international market distortions and that Congress never intended for RFS waiver authorities to serve as tools for managing trade flows.
EPA appears to be adopting American Petroleum Institute’s (API) argument that ‘domestic supply’ somehow means ‘domestic production,’ when this is clearly not the case. The domestic supply of biofuels includes both imported and domestically produced biofuel volumes, just as USDA recognizes in its monthly supply-demand estimates that the total domestic supply of corn includes corn imports from other countries, Dinneen suggested.
He added that even if EPA acted to reduce the advanced biofuel and total renewable fuel volume requirements, it is “unlikely those actions would significantly curtail biodiesel imports.” Biomass-based and renewable diesel imports are often available to obligated parties at a lower cost than some sources of US-produced product, likely due to the subsidization of biodiesel and renewable diesel production by certain exporting nations.
Thus, reducing the biomass-based diesel and/or advanced biofuel standard likely would have the effect of shutting marginal US-made product out of the marketplace, rather than curtailing imports. The RFA will formally submit comments for the record, but we don’t see justification for any further reductions to the 2018 RVO proposal. Doing so would only harm US consumers, said Dinneen.