Biofuels Groups Eye Long-Term Vehicle GHG Rule As Venue For Sector

Source: By Doug Obey, Inside EPA • Posted: Tuesday, August 31, 2021

Biofuels groups are largely shifting their advocacy focus to future EPA rules, including its longer-term vehicle greenhouse gas standards, as they push ethanol and other biofuels as a low-carbon strategy, after the agency’s near-term auto GHG plan omitted discussion of biofuels as a potential compliance tool.

The strategy surfaced in testimony from multiple biofuel backers at an Aug. 25-26 public hearing on EPA’s proposal for vehicle GHG limits from model year 2023-2026, a policy that focuses largely on other strategies such as boosting efficiency and incrementally deploying more electric vehicles.

The dynamic is also underscoring how the Biden administration’s heavy focus on electrification is posing new challenges for the biofuels sector, which has long focused on blending its product into the liquid fuel supply.

“We are deeply disappointed by the failure of EPA to request comment on the role of higher-octane, lower-carbon fuels to advance the administration’s climate, public health, and environmental justice objectives,” Tom Daschle, the former Senate Democratic Leader who now chairs the High Octane Low Carbon Alliance, said in Aug. 26 testimony channeling many biofuels groups’ reaction to EPA’s MY23-26 rule.

The coalition includes the National Farmers Union, the Clean Fuels Development Coalition, Renewable Fuels Association (RFA) and the National Corn Growers Association.

Both his group and a coalition of Midwestern governors unsuccessfully pressed for provisions in EPA’s plan favorable to higher-level ethanol blends.

“A revised [rule] that provides an expanded market for high-octane ethanol is a means to reduce GHGs and harmful air emissions, provide much needed economic stability in rural America and provide countless health and economic benefits to all Americans,” wrote Minnesota Gov. Tim Walz (D) and South Dakota Gov. Kristi Noem (R) in a July 23 letter to EPA Administrator Michael Regan on behalf of the Governors’ Biofuels Coalition.

Yet, some had suggested even before EPA released its proposal that prospects were not high for major action on ethanol in the measure, in part because of the agency’s tight timeline for completing the rule by the end of the year, enabling tougher standards to take effect in MY23.

That schedule alone complicates any efforts to inject fuels-related issues into a rule seen largely as a partial reversal of Trump-era rollbacks to vehicle GHG standards, with more ambitious steps to follow.

Union of Concerned Scientists vehicle analyst David Cooke also tells Inside EPA’s Climate Extra that the lack of significant market share for high-octane ethanol blends — as well as a lack of a related certification fuel — makes discussion of such fuels in a rule extending to MY26 largely academic, but maybe less so farther in the future.

“It doesn’t make sense to be talking about it in this [near-term GHG] rule, because you can’t guarantee it is going to be used in a car,” Cooke says.

High-Octane Standard

But the administration is already promising a “multi-pollutant rule” extending at least through MY30 for light duty vehicles, as outlined in President Joe Biden’s August executive order touting the importance of vehicle electrification. Daschle’s testimony nodded to that process.

And “we note EPA’s recognition that ‘in addition to substantially reducing greenhouse gas emissions, a longer-term rulemaking could also address criteria pollutant and air toxic emissions from the new light-duty vehicle fleet,’” Daschle said, touting high-octane fuels as a solution to GHG and criteria pollutant emissions. “We urge the agency to use that rulemaking to propose a high-octane fuel standard.”

Daschle did renew his press for some EPA attention in its near-term standards, saying his coalition plans to weigh in on the agency’s request for comment on strengthening the MY26 GHG standard in particular, beyond EPA’s preferred approach.

But he also framed such a move as less a venue for an on-the-ground boost to biofuels and more of a signal for future policy direction, urging EPA to “signal in the final rule its intention for 2027 and beyond to enable automakers to optimize the benefits of higher-octane, low-carbon fuels in both new and existing internal combustion engines.”

RFA President Geoff Cooper in Aug 25 testimony similarly criticized EPA’s proposal as a “missed critical opportunity to solicit public comment on potential regulatory pathways for adopting high-octane, low-carbon liquid fuels as a means of improving fuel economy and reducing emissions.”

He added: “Recent studies and analyses, including the Department of Energy’s comprehensive Co-Optima research program, clearly show that ethanol-based, high-octane, low-carbon fuels can increase fuel efficiency by 5-9 percent and reduce lifecycle GHG emissions per mile by 9 percent or more when paired with the right engine technologies.”

But Cooper’s most specific demand is for the final rule to include a statement “expressing the agency’s intent to consider adoption of a high octane (98-100 RON) fuel standard as part of a future rulemaking to establish standards for 2027 and beyond.”

He also urged EPA to treat any written comments on the role of high-octane, low-carbon fuels as “germane” to the MY23-26 rule, while calling on officials to use “the current rulemaking process and future rulemakings to establish the roadmap for increasing the required minimum octane rating for our nation’s light duty vehicle fleet.”

Various Strategies

Meanwhile, Growth Energy official Chris Bliley in Aug. 25 testimony called for “strong and clear policy” to encourage high-octane, low-carbon ethanol blends. Bliley, however, made clear that such a strategy includes a range of actions, at least some of which would be clearly separate from the current vehicle GHG proposal.

The group’s priorities include steps to encourage use of ethanol blends such as E15 and E85; a minimum octane standard; EPA approval of a high-octane, mid-level ethanol fuel; and “strong” renewable fuel standard (RFS) blending requirements for 2021 and 2022.

One Growth Energy pitch perhaps more closely tied to the near-term GHG rule itself is a call for EPA and the Department of Transportation to “work together to re-establish credits for the production of flex-fuel vehicles.”

Earlier versions of these credits were phased out in prior rulemakings after strong pushback from efficiency advocates who criticized them as enabling merely on-paper compliance from automakers, given that many flex-fuel vehicles in practice run on conventional gasoline.

An analysis of the MY23-26 proposal by the consulting firm ClearView Energy Partners says the administration’s longer-term auto GHG rule is a more likely venue for biofuel-friendly language, given the potential that ambitious electrification plans in that rule could put the biofuel sector on edge without simultaneous pro-biofuel provisions.

“In a bid for political support in states and districts levered to biofuels and biofuels feedstock production, the Administration may seek to pair future vehicle standards with support for biofuels blending,” the analysis notes. — Doug Obey (