EPA sets prices for RFS cellulosic waivers 

Source: Amanda Peterka, E&E reporter • Posted: Thursday, March 26, 2015

U.S. EPA today set the 2014 and 2015 prices that refiners must pay to obtain waivers from the renewable fuel standard program’s cellulosic biofuel requirements.

The 2014 price will be $0.29 a gallon, and the 2015 price $0.64 a gallon, EPA said in a direct final rulemaking. The agency also said it would change how it announces yearly prices from a formal rulemaking to the posting of a notice on its website.

EPA also released a guidance for stakeholder compliance with the cellulosic biofuel portion of the RFS and when refiners can purchase waivers from those requirements.

“The above actions intend to provide an opportunity for more timely release of information and greater understanding of how compliance may be achieved with certain provisions of the RFS program,” EPA Senior Policy Adviser Paul Argyropoulos said in an email to stakeholders obtained by E&ENews PM.

Cellulosic biofuel is made from non-food plant materials such as agriculture residue, perennial grasses and municipal solid waste. Waiver credits are available to refiners if there’s not enough actual cellulosic biofuel in the marketplace to meet annual RFS requirements.

In the past, EPA has overestimated the amount of cellulosic biofuels available in the marketplace in setting RFS requirements, leading refiners to complain they’d been penalized for failing to use nonexistent fuel. The agency has yet to issue RFS standards for 2014 or 2015.

To calculate the waiver credit prices announced today, EPA used the greater of $0.25 or $3 a gallon minus the wholesale price of gasoline, adjusted for inflation. The 2013 price was $0.42 a gallon.

To buy a waiver, refiners must also retire a separate advance biofuel paper credit known as a renewable identification number, meaning the actual cost is higher.

Today’s rule — which will become final if there’s no adverse comment — “will provide much-needed liquidity,” the Biotechnology Industry Organization, which represents cellulosic producers, said in an email.