The US Environmental Protection Agency (EPA) has published its proposed package of actions setting biofuels volumes for years 2022, 2021, and 2020, and introducing regulatory changes intended to enhance strengthen the role of the Renewable Fuel Standard (RFS). In addition, EPA is seeking public comment on a proposed decision to deny petitions to exempt small refineries from their obligations under the RFS for one or more compliance years between 2016 and 2021.
According to EPA, these actions “reflect the Biden Administration’s commitment to reset and strengthen the RFS program following years of mismanagement by the previous administration and disruptions to the fuels market stemming from the coronavirus (COVID-19) pandemic.
Despite multiple challenging dynamics affecting the RFS program in recent years, EPA remains committed to the growth of biofuels in America as a critical strategy to secure a clean, zero-carbon energy future. This package of actions will enable us to get the RFS program back in growth mode by setting ambitious levels for 2022, and by reinforcing the foundation of the program so that it’s rooted in science and the law, said EPA Administrator Michael S. Regan.
Highest proposed volumes ever
The Clean Air Act requires (CAA) EPA to set annual RFS volumes of biofuels that must be used for transportation fuel for four categories of biofuels: total, advanced, cellulosic, and biomass-based diesel. EPA implements the RFS program in consultation with the US Department of Agriculture (USDA), the US Department of Energy (DOE), and consistent with direction from Congress.
For 2022, EPA is proposing the highest total volumes in history, putting the program on a stable trajectory that provides for significant growth. The proposed volumes for 2022 are over 3.5 billion (US) gallons (≈ 13.25 billion litres) higher than the volume of renewable fuel used in 2020.
The proposed volume of advanced biofuel for 2022 is over 1 billion gallons (≈ 3.78 billion litres) greater than the volume used in 2020. EPA is also proposing to add a 250-million-gallon (≈ 946.25 million litre) “supplemental obligation” to the volumes proposed for 2022 and stating its intent to add another 250 million gallons (≈ 946.25 million litres) in 2023.
This the EPA says “would address” the remand of the 2014-2016 annual rule by the DC Circuit Court of Appeals in Americans for Clean Energy v. EPA. Spreading this obligation over two years would provide the market time to respond to this supplemental obligation.
The previous Administration failed to act on the Agency’s outstanding obligation to address the court’s remand.
Allow inclusion of biointermediates
To promote efficiency and opportunity in producing biofuels, this action also proposes a regulatory framework to allow biointermediates to be included in the RFS program while ensuring environmental and programmatic safeguards are in place.
Biointermediates are feedstocks that have been partially converted at one facility but are then sent to a separate facility for final processing into an RFS-qualified biofuel. Providing a way for producers to utilize biointermediates could reduce biofuel production costs in some cases, and potentially expand opportunities for more cost-effective biomass-based diesel, and advanced, and cellulosic biofuels.
Small Refinery Exemptions
In addition, EPA is seeking public comment on a proposed decision to deny petitions to exempt small refineries from their obligations under the RFS on the grounds that petitioners failed to show that EPA has a basis under the Clean Air Act and recent federal case law to approve them.
The proposed action denying 65 pending applications for small refinery exemptions (SREs) responds to the decision from the US Court of Appeals for the Tenth Circuit in Renewable Fuels Association (RFA) et al. v. EPA.
This decision, issued in 2020, narrowed the situations in which EPA can grant SREs. EPA is sharing a proposed adjudication of pending SRE petitions that presents EPA’s approach in applying the direction from the Court.
The proposed decision document articulates the Agency’s updated interpretation of its CAA statutory authority to grant SREs, and its analysis of the available data on RFS costs and market dynamics that compel the proposed denial.
Because today’s proposed SRE action is highly consequential to impacted parties, reflects an updated interpretation of the CAA, and is a change from previous EPA practice, we are implementing a public notice-and-comment process and seeking input from stakeholders, the public, and from individual petitioning refineries. We encourage all interested parties to share information, data, and legal interpretations, EPA said in a statement.