EPA releases 2014-16 RFS volume obligations

EPA releases 2014-16 RFS volume obligations

U.S. EPA proposes 'ambitious increases' in advanced biofuels and renewable fuels for 2015 and 2016, but they don't meet Congressional goals

The U.S. EPA on Friday released new numbers for its Renewable Fuel Standard Renewable Volume Obligations, surprising some with increases across the renewable fuels spectrum, but disappointing others for inability to meet Congressional mandates.

Related: Reports: Feds plan to boost blender pumps, RFS volumes expected today

For 2014, EPA proposed levels that were actually produced and used as transportation and jet fuel or heating oil in the U.S.

For 2015, EPA is proposing 16.30 billion gallons of total renewable fuels; for 2016 that total moves up to 17.40 billion gallons. That's an increase from proposed 2014 levels that were released in November, 2013, which amounted to 15.21 billion gallons.

U.S. EPA proposes 'ambitious increases' in advanced biofuels and renewable fuels for 2015 and 2016 (Photo by Justin Sullivan/Getty Images)

EPA said in its announcement that increases were "ambitious" but don't meet volumes originally set by Congress.

"Due to constraints in the fuel market to accommodate increasing volumes of ethanol, along with limits on the availability of non-ethanol renewable fuels, the volume targets specified by Congress in the Clean Air Act for 2014, 2015 and 2016 cannot be achieved," the announcement said.

EPA said though the volumes were lower than Congress asked for, they are "above historical levels and would ensure continued growth in advanced biofuels."

Once the proposal is published in the Federal Register, it will be open for public comment until July 27, 2015. A public hearing also will be held June 25 in Kansas City, Kan.

Related: EPA forced to release RFS levels

EPA said it would "take action" on the proposal by Nov. 30, 2015. That timeline would mark a return to original RVO release deadlines. The agency was required earlier this year by consent decree to release proposed volumes; it previously had missed several deadlines, drawing criticism from renewables groups that this sluggishness was stifling investment in the industry.

Commodity, ethanol groups uneasy about proposal >>

EPA releases 2014-16 RFS volume obligations

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Industry comments
CEO of Growth Energy Tom Buis in a statement criticized EPA's volumes for not meeting Congress' requirements.

"Today's proposals are better than EPA's initial proposed rule for 2014, but they still need significant improvement," he said. "We have sincere concerns that these proposed numbers are not moving forward to the degree that Congress had intended for the RFS."

Buis said the only way RFS goals can be reached is by introducing higher blends. "The initial read on EPA's proposal is they have simply acquiesced to the demands of Big Oil," Buis said.

The National Corn Growers Association also was concerned with the proposal's approach at gradual increases. The group's president, Chip Bowling, said the EPA's approach cuts 3.75 billion gallons from the original mandate between 2014 and 2016.

"This represents nearly a billion and a half bushels in lost corn demand. The only beneficiary of the EPA’s decision is Big Oil, which has continuously sought to undermine the development of clean, renewable fuels," he said.

He also didn't rule out legal action. "We are evaluating our legal options for defending the law and protecting the rights of farmers and consumers. We will fight to protect and build profitable demand for corn, which is of fundamental interest to NCGA and our farmers."

Meanwhile, the American Soybean Association acknowledged the proposal's increase over previously proposed levels, but said it does not properly capitalize or recognize the growth potential of biodiesel.

“The administration wants to address climate change and reduce greenhouse gas emissions and biodiesel - a domestically produced, renewable fuel that is proven to achieve emissions reductions up to 86 percent better than petroleum diesel – can contribute more to that effort," ASA President Wade Cowan said.

That sentiment of increasing biodiesel use was shared by the National Biodiesel Board, but it was generally more positive about the RFS proposal, calling it a "significant step in the right direction."

“It is not perfect, but it will get the U.S. biodiesel industry growing again," said NBB CEO Joe Jobe. Total U.S. biodiesel consumption fell to 1.75 billion gallons for 2014, according to EPA, down slightly from nearly 1.8 billion gallons in 2013.

NBB earlier this year said stagnant RFS action had something to do with those lower levels, but Jobe said the numbers in the most recent RFS proposal can help get the industry and jobs going again.

“Biodiesel has proven that Advanced Biofuels can do just what we said they would, which is create jobs and strengthen our energy security while significantly cutting harmful pollution from petroleum," Jobe said, but "more can be done, and we particularly look forward to working with the administration on strengthening biodiesel volumes for 2016 and 2017."

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