EPA Finalizes RFS Compliance Delays

Source: By Todd Neeley, DTN Staff Reporter • Posted: Sunday, January 30, 2022

EPA Finalizes RFS Compliance Delays Despite Call From Biofuels to Enforce Law

EPA finalized a rule to delay Renewable Fuel Standard compliance deadlines for refiners. (DTN file photo)
EPA finalized a rule to delay Renewable Fuel Standard compliance deadlines for refiners. (DTN file photo)

LINCOLN, Neb. (DTN) — After EPA’s administrator vowed last year to get the Renewable Fuel Standard on track, the agency on Friday finalized an extension of compliance deadlines for refiners for 2019, 2020, 2021 and 2022.

The 2019 renewable volume obligation compliance deadline for small refineries originally was set for Nov. 30, 2021, and the 2020 RVO compliance deadline for all obligated parties was previously set for Jan. 31, 2022.

On Friday, EPA’s final action rolls compliance deadlines based on publication of the final RVOs for 2020-2022.

During a public hearing in December, ethanol industry groups asked the agency to not change compliance deadlines for fear the action would hurt ethanol producers.

Growth Energy CEO Emily Skor said in a statement the extension of the deadlines was “completely contradictory” to efforts to lower gasoline prices.

“By continuing to delay compliance deadlines, EPA is creating uncertainty in the marketplace and stunting the blending of biofuel needed to decarbonize transportation as the Renewable Fuel Standard intended,” Skor said.

“Moving ahead, it is vital for EPA to get the RFS back on track. EPA can start by making needed changes to its proposed cuts to the 2020 RVOs and low volumes for 2021.”

Skor said the agency needs to “swiftly finalize” proposed volumes for 2022.

“(EPA) Administrator (Michael) Regan has emphasized time and time again the need for transparency and certainty when it comes to the RFS,” she said. “Ensuring timely compliance and finalizing strong biofuel blends can help Administrator Regan follow through on these promises and provide much-needed certainty for biofuel producers.”

Renewable Fuels Association President and CEO Geoff Cooper said in a statement to DTN the agency’s final action was “very disappointing” and creates concerns about the program going forward.

“With this final rule, EPA just gave itself the power to perpetually delay implementation of yearly RFS blending requirements and continually kick the can down the road on compliance deadlines,” Cooper said.

“This is not what Congress intended, and this approach could exacerbate the uncertainty and instability around RFS implementation that was created by the past administration. Ethanol producers, farmers, fuel retailers and refiners need and deserve certainty and predictability when it comes to RFS implementation timelines. That’s why Congress put certain annual deadlines into the law for RFS implementation.”

Back in December, the Biden administration released a broad RFS proposal that includes corn-ethanol cuts, the rejection of all pending small-refinery exemptions and the approval of federal aid to biofuel producers hurt by the COVID-19 economic shutdown.

The EPA proposal calls for retroactive cuts to the corn-ethanol portion of RFS volumes below 15 billion gallons at 12.5 billion for 2020 and sets the level at 13.32 billion for 2021.

The proposal delivered a victory to oil producers who have been asking for cuts to conventional ethanol for some time. The agency would then increase corn-ethanol volumes to 15 billion gallons in 2022.

The negative RFS news for biofuels and agriculture was offset by EPA’s proposed rejection of the pending 65 small-refinery exemption requests for 2016 through 2021. As part of the announcement, EPA proposed a new method for determining who receives exemptions.

Also, USDA announced the approval of $800 million in aid for biofuel producers hurt by the COVID-19 economic shutdown.

Back in November, the EPA said in a news release announcing the extension of RFS deadlines, that the extensions would “help ensure that obligated parties are positioned to fully comply with their RFS obligations by ensuring that each year’s compliance deadline falls after the standards for the subsequent compliance year are known. The proposed approach for 2022 (and beyond) would also avoid EPA having to repeatedly extend compliance deadlines for obligated parties should promulgation of the subsequent year’s standards be delayed.”

Earlier last year, EPA extended 2019 compliance deadlines for small refiners and all obligated parties.

Read the final rule here: https://www.epa.gov/…

Read more on DTN:

“EPA to Delay RFS Deadlines for Refiners,” https://www.dtnpf.com/…

“Biofuels, Ag Push EPA to Enforce RFS,” https://www.dtnpf.com/…

“EPA Proposes Corn-Ethanol Cuts to RFS,” https://www.dtnpf.com/…

Todd Neeley can be reached at todd.neeley@dtn.com

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