After much delay, the U.S. Environmental Protection Agency announced finalized rules on Feb. 3 for implementing the long-term renewable fuels standard referred to as RFS2 of 36 billion gallons by 2022, which was established by the Energy Independence and Security Act of 2007.
EPA Administrator Lisa Jackson said the agency has also redefined the national renewable fuels targets, lifting a cap on the production of corn-based ethanol above the 15 billion gallon-a-year limit as part of efforts to a total renewable fuel production to reach 36 billion gallons by 2022. She said, however, that the agency had lowered dramatically the original 100 million gallon cellulosic ethanol output target for this year to 6.5 million gallons.
As expected, the EPA also combined the 2009 and 2010 demand requirements listed in EISA for biomass-based diesel after delaying implementation of the 500 million gallon mandate in 2009 because the agency said it did not have a process in place to measure compliance. For 2010, the EPA set the biodiesel mandate at 1.15 billion gallons, adding 2009’s 500 million gallon requirement to this year’s 650 million gallon carve-out in the mandate.
The announcements by Jackson were part of a coordinated effort by the Obama administration to reinvigorate the clean energy sector, and it came after the president had met with 11 state governors from across the country to explain his strategy for advancing renewable fuels.
RFS2, designed to reduce oil use in transportation fuels consumed in the U.S., requires biofuels production to grow from last year’s 11.1 billion gallons to 36 billion gallons in 2022, with 21 billion gallons to come from advanced biofuels. Jackson said increasing renewable fuels will reduce dependence on oil by more than 328 million bbl a year and reduce greenhouse gas emissions more than 138 million metric tons a year when fully phased in by 2022.
Jackson, however, didn’t address calls by pro-ethanol groups to raise the ratio of allowable ethanol in gasoline to 15 percent. Growth Energy and other industry groups petitioned for an E15 waiver last year. The EPA was obligated to respond to the petition in December, which it did, delaying the decision until mid 2010. Trade sources thought the E15 decision would come with the RFS2 announcement, but it didn’t.
The EPA decisions on RFS2 received mixed reaction, with ethanol groups welcoming the long-awaited news while the oil and gas industry criticized the new rules.
New Fuels Alliance, a national coalition of bio-based fuel companies and stakeholders based in Boston, said the finalized rules brought the clarity the industry was looking for.
“We now know that RFS2 will apply this year, and that a large suite of both conventional and advanced biofuels meet the stringent greenhouse gas (GHG) requirements of the new program,” said the group. “It is now clear that conventional biofuels made from corn and soybeans reduce GHG emissions, and are a step in the right direction in terms of reducing the carbon footprint of the U.S. transportation fuel sector.”
The Brazilian Sugarcane Industry or UNICA also said that as part of the RFS2 decision, the EPA designated sugarcane ethanol as an advanced biofuel that lowers GHG emissions by more than 50 percent.
“The EPA’s decision underscores the many environmental benefits of sugarcane ethanol and reaffirms how this low carbon, advanced renewable fuel can help the world mitigate against climate change while diversifying America's energy resources,” said Joel Velasco, UNICA’s chief representative in Washington.
But the American Petroleum Institute issued a statement saying, “While the U.S. oil and natural gas industry recognizes and appreciates the role of ethanol and other biofuels in the fuel marketplace, we are deeply concerned that the announcement today could result in higher consumer costs.”
The API said the RFS2 rule penalizes refiners and ultimately consumers, and added, “API supports a realistic and workable renewable fuels standard (RFS). Given the complexity of this new regulation, we question how realistic and workable it will be.”
