What's next for Renewable Fuel Standard?

What's next for Renewable Fuel Standard?

Iowa experience proves EPA should follow the law and carry out the RFS as Congress intended.

Like thousands of other people and organizations, the Iowa Renewable Fuels Association (IRFA) last week submitted comments on the proposed Renewable Fuel Standard (RFS) volumes, urging the U.S. Environmental Protection Agency (EPA) to follow the law as Congress intended. That is, EPA should set the final targets at 15 billion gallons for corn-based ethanol in 2017 and at least 2.5 billion gallons for biomass-based diesel in 2018. The deadline to submit public comments to EPA was midnight July 11.

ROBUST RFS IS NEEDED: “There is no legal, marketplace or consumer rationale for reducing the conventional biofuels level in the Renewable Fuels Standard,” says Monte Shaw of the Iowa Renewable Fuels Association. “There’s no need to change something that works.”

“The current RFS proposal by the EPA simply doesn’t go far enough in advancing the use of homegrown, cleaner-burning renewable fuels,” says IRFA executive director Monte Shaw. “From feedstocks and production capabilities to consumer use and marketplace trends, every data point demonstrates that the EPA should increase the proposed volumes and finalize the corn-based ethanol levels at 15 billion gallons for 2017 and the biomass-based diesel levels at 2.5 billion gallons for 2018.”

EPA is scheduled to announce a final ruling in November
As of July 6 EPA had received more than 6,200 public comments on its proposed volume requirements for the RFS. On May 18 EPA proposed setting the volume requirements for ethanol for 2017 and for biodiesel for 2018 lower than the targets called for in the RFS. While these EPA proposals are increases from the 2016 requirements, they aren’t as high as specified in the law. “The federal Clean Air Act requires EPA to set the renewable fuel volumes each year, as the minimum amounts of renewable fuel such as ethanol and biodiesel to be mixed into the nation’s motor fuel supply,” notes Shaw.

Now that the public comment period has closed, EPA will evaluate the comments it has received and come up with a final decision. EPA is supposed to announce a final ruling in November.

More motorists would buy E15 and E85 if it were more available
In sending its comments to EPA regarding corn-based ethanol volume requirements, the IRFA stated: “The only physical barrier to greater use of renewable fuels is the inability of the average motorist to pull up to a fuel pump and choose from a variety of fuel options.”

The IRFA statement added, “This restriction on competition is not the result of consumer preference, equipment availability or renewable fuels supply. Iowa retailers have had great success with higher ethanol blends like E15 and E85, when they are allowed to sell it. Customer demand is high. Contrary to the blatantly false claims that a ‘blend wall’ exists, even more motorists would buy E15 and E85 if it were just available for them to choose.”

Retailers offering higher blends are successfully selling them
In fact, Iowa data shows retailers that offer a range of ethanol blended fueling options through blender pumps are already meeting the full 2022 RFS levels today, often meeting or exceeding the 18% to 19% renewable content targets for gasoline sales.

What about biodiesel? Regarding biodiesel, the IRFA commented, “Biodiesel has been an unmitigated success under the RFS. In fact, the U.S. is expected to use about 2.5 billion gallons of biomass-based diesel in 2016. That’s 400 million gallons more than the number EPA proposes to set for 2018: two years from now. Finalizing the EPA’s proposed level would simply memorialize the status quo while nearly 60% of U.S. biodiesel industry capacity sits idle.”

Imports of biodiesel into U.S. are continuing to increase
“Through May of 2016, roughly 30% of the biodiesel market was imports, and the number continues to grow…Congress gave the EPA the authority to set the biodiesel level to ensure growth for this widely-successful advanced biofuel. Factoring in imports, the proposed level does not achieve this goal.”

Discussing Iowa-specific data, the IRFA commented, “In 2010, the average blend level of biodiesel-blended gallons sold in Iowa was 3.1%. By 2015, the average biodiesel blend level in Iowa had more than tripled to 11.0%—a level that simply could not have been reached without selling a significant amount of not just B11, but B15 and B20 as well.”

The IRFA concluded its statement to the EPA by saying, “The bottom line remains clear: there is no legal, marketplace or consumer rationale for reducing the conventional biofuels level below the statutory requirements.”

Obama administration is urged to truly support the RFS
“We urge the Obama Administration to re-embrace the goals of the RFS that President Obama voted for in 2007, to level the playing field against 100 years of oil subsidies. We urge the Obama Administration to reexamine its support and aspirations for the RFS voiced back in 2008. And we urge the Obama Administration to set RFS levels -- in this, its final opportunity -- that recommit the RFS to pushing for more competition, more energy security, more jobs and a cleaner environment.”

To read IRFA’s full comments, please click here.

In May, the EPA proposed capping the corn-based ethanol portion of the RFS at 14.8 billion gallons for 2017, below levels prescribed by Congress under the Energy Independence and Security Act of 2007. Also included was the biomass-based diesel level for 2018, proposed at just 2.1 billion gallons. To view the EPA’s full proposal, please click here.

Iowa biofuel industry adds significantly to the state’s economy
According to a recent IRFA study, Iowa’s renewable fuels industry accounts for more than $4.6 billion of Iowa GDP, generates $2.3 billion in income for Iowa households and supports more than 43,000 jobs throughout all sectors of the Iowa economy.

Iowa is the nation’s leader in renewable fuels production. Iowa has 43 ethanol refineries capable of producing 4 billion gallons annually, including nearly 55 million gallons of annual cellulosic ethanol production capacity. In addition, Iowa has 12 biodiesel facilities with the capacity to produce nearly 315 million gallons annually.

The Iowa Renewable Fuels Association was formed in 2002 to represent the state’s liquid renewable fuels industry. The trade group fosters the development and growth of the renewable fuels industry in Iowa through education, promotion, legislation and infrastructure development. For more information, visit IowaRFA.org.

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