Ambitious ‘biofuel America’ plan faces overhaul in 2022

Source: By Chuck Abbott, Successful Farming • Posted: Sunday, December 19, 2021

During the ethanol boom of the early 2000s, Congress set an ambitious target of quadrupling the amount of renewable fuel mixed into gasoline for America’s cars and pickup trucks. But while corn ethanol has lived up to its part of the plan, cleaner-burning “advanced” biofuels have been slow to come to market — two factors for the EPA to consider as it faces a regulatory reset of the Renewable Fuel Standard in the new year.

The agency says it will propose regulations in May for the production of conventional and advanced biofuels beginning in 2023. They would be based on criteria in air pollution law, such as the impact of renewable fuels on air quality, climate change, wildlife habitat, food and fuel prices, and availability of advanced fuels.

The new rules would be finalized by next December, according to a brief EPA description published in the government’s agenda of regulatory action.

“For 2023 and beyond, we want growth for all categories of renewable fuels — or, at the very minimum, we’re looking for stability in the volumes required,” said Geoff Cooper, president of the Renewable Fuels Association, on Thursday. “EPA’s proposal for 2022 volumes serves as a good springboard and starting point for 2023+ volumes.”

Last week, the EPA proposed an RFS of 20.77 billion gallons for 2022, the largest volume ever. Three-quarters of it would come from conventional biofuels, with corn ethanol making up the lion’s share. Biodiesel would account for nearly half of the 5.77 billion gallons of advanced biofuels.

EPA administrator Michael Regan said the agency was putting the RFS “back into growth mode” following the disruptions of the pandemic, when biofuel sales, mirroring the gasoline market, shriveled in the face of stay-at-home orders and economic retrenchment.

Renewable fuel production has mushroomed in the past two decades, but the industry has not met congressional expectations of a vibrant advanced biofuels sector.

The 2008 RFS was 9 billion gallons, all of it expected to come from conventional sources, such as corn ethanol. Advanced biofuels — such as biodiesel and ethanol distilled from grasses, woody plants or corn stover — were expected to gather momentum by 2015 and to eventually make up the major part of the RFS — 21 billion gallons in 2022 compared to 15 billion gallons of first-generation fuels.

But advanced biofuels proved expensive and difficult to produce. Three cellulosic ethanol plants that went into operation in 2014 and 2015 were shut down by the end of 2019. Cellulosic ethanol was expected to be a breakthrough biofuel because it can be made from crop debris instead of relying on food crops. The EPA repeatedly reduced the annual RFS assigned to advanced biofuels, saying the industry was too small to meet the targets written into the RFS statute. The industry said the reductions drove away investors and deterred the use of their product.

Meanwhile, corn ethanol production has tracked or outpaced the RFS timetable. It reached 16.1 billion gallons in 2018. Some 1.3 billion gallons were exported in the year ending on Sept. 30. The USDA estimated ethanol exports will be worth a record $2.9 billion in the marketing year that opened on Oct. 1.

While ethanol is popular in farm country as a jobs and revenue maker, it is perennially attacked by the oil industry. Some environmental groups say the demand for corn to make ethanol has meant the loss of wildlife habitat and the conversion of fragile land to crop production.

In addition to the RFS reset, the EPA said it would propose a regulation to designate renewable diesel fuel made from canola oil as an advanced fuel under the RFS program.

The EPA home page for the RFS is available here.