EPA ramps up blending requirements in final RFS

Source: Tiffany Stecker, E&E reporter • Posted: Tuesday, December 1, 2015

U.S. EPA will raise the annual blending requirements for biofuels in 2016, partially triggering a statutory provision that will send the agency back to the drawing board on how to administer the renewable fuel standard.

EPA’s final rule sets the level of required volumes of biofuel for 2014, 2015 and 2016, with an additional 2017 requirement for biodiesel only.

Under the rule, U.S. fuel blenders will be required to mix 16.93 billion gallons of biofuels into fossil fuels in 2015 and 18.11 billion gallons in 2016, a 4 percent increase from the amounts in the proposed rule issued in May but less than what Congress intended when it expanded the RFS program eight years ago.

Of that, conventional corn ethanol will make up 14.05 billion gallons in 2015 and 14.5 billion gallons in 2016, making up the bulk of the biofuel blended in the U.S. gasoline supply. This requirement is a slight increase over what was proposed earlier this year and about 1 billion gallons below the statutory level of 15 billion gallons annually for 2015 and beyond.

These levels are not high enough to avoid the “reset” provision for overall fuels. Congress wrote into the program a provision that requires EPA to tweak the statutory volumes of renewable fuels starting in 2016 if the agency has reduced any of the mandates by at least 20 percent for two consecutive years or by at least 50 percent for a single year.

EPA now must issue a proposal to reset the advanced biofuel mandate. Advanced biofuel levels were set at 2.88 billion gallons for 2015 and 3.61 billion gallons for 2016, slightly less in 2015, but more in 2016 over the proposed level.

According to the 2007 schedule, refiners were expected to blend 5.5 billion gallons in 2015 and 7.25 billion gallons in 2016. Advanced biofuels are fuels that reduce greenhouse gases 60 percent or more compared with gasoline or diesel and include Brazilian sugar cane ethanol; biodiesel; and fuels from feedstocks such as algae, grasses or municipal waste.

In order to avoid the reset provision, EPA would have needed to require 4.4 billion gallons or more of advanced fuels in 2015 and 5.8 billion gallons in 2016.

The RFS was enacted in 2005 and expanded with the 2007 Energy Independence and Security Act, which set the country on a path to produce 36 billion gallons of biofuels annually by 2022.

The release of the highly anticipated rule was preceded by a multimillion-dollar ad war between supporters and opponents of the program. Most of the ads centered on biofuels’ role in reducing carbon emissions — RFS backers promoted the fuels’ low-carbon qualities, while doubters questioned the conventional wisdom that ethanol reduces global warming — to coincide with President Obama’s speech at the U.N. climate conference in Paris today.