The US Environmental Protection Agency (EPA) issued on June 21, 20203, a final rule under the Renewable Fuel Standard (RFS) program that establishes the biofuel volume requirements for 2023 to 2025. This final rule builds on the RFS program’s progress over the previous two years and reflects the Biden-Harris Administration’s commitment to strengthening the nation’s energy independence, advancing low-carbon fuels, and supporting agricultural communities.
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According to EPA, the final rule strengthens US energy security by reducing reliance on foreign sources of oil by roughly 130 000 to 140 000 barrels of oil per day over the time frame of the final rule, 2023–2025.
The anticipated value of the energy security benefits to the US economy ranges from US$173-US$192 million per year over the time frame of the final rule.
The Set Rule establishes the biofuel volume requirements and associated percentage standards for cellulosic biofuel, biomass-based diesel (BBD), advanced biofuel, and total renewable fuel for 2023–2025.
It also completes the EPA’s response to a court remand of the 2016 annual rule by establishing a supplemental volume requirement of 250 million (US) gallons (≈ 946.25 million litres) of renewable fuel for 2023.
The Set Rule includes steady growth of biofuels for use in the nation’s fuel supply for 2023, 2024, and 2025. The Energy Independence and Security Act (EISA) of 2007 does not specify statutory volumes after 2022, and EPA in this rule is establishing final biofuel volume targets for all categories under the “set” authority provided by the Clean Air Act (CAA).
When determining biofuel volumes for years after 2022, EPA must consider a variety of factors specified in the statute, including costs, air quality, climate change, implementation of the program to date, energy security, infrastructure issues, commodity prices, water quality, and supply.
The final rule also discusses the EPA’s intent to monitor the ongoing implementation of the RFS program and its impacts on domestic refineries, which have a critical role to play in US energy security.
From day one, EPA has been committed to the growth of renewable fuels that play a critical role in diversifying our country’s energy mix and combatting climate change, all while providing good-paying jobs and economic benefits to communities across the country. Today’s final rule reflects our efforts to ensure the stability of the program for years to come, protect consumers from high fuel costs, strengthen the rural economy, support domestic production of cleaner fuels, and help reduce greenhouse gas emissions, said EPA Administrator Michael S. Regan.
Finalizing regulatory changes for biogas and eRINS
In addition to setting the volume requirements, EPA is finalizing several regulatory changes intended to expand the use of biogas under the program while, at the same time, putting in place provisions that will improve the operation of the RFS program.
The final rule follows a robust engagement strategy and reflects comments from a diverse set of stakeholders on the potential economic impacts of the program.
EPA says that it is “committed to the successful implementation of the program and intends to use all available data and tools to monitor the implementation of the RFS program and its impacts.”
For example, EPA will within 45 days meet with the Commodity Futures Trading Commission (CFTC) to make sure existing agreements between EPA and CFTC are sufficient to monitor renewable identification numbers (RINs) trades for potential market manipulation.
In addition, EPA has identified a clear set of market indicators – from the costs to consumers of transportation fuel to the stability of fuel supplies and domestic refining assets – that it will continue to monitor in real-time to ensure successful implementation.
EPA continues to assess the comments received on proposed regulations governing the generation of Renewable Identification Numbers (RINs), which are RFS compliance credits, for electricity made from renewable biomass that is used for transportation fuel (eRINs).
The EPA will continue to work on potential paths forward for the eRIN program, while further reviewing the comments received on the proposal and seeking additional input from stakeholders to inform potential next steps on the eRIN program.
