EPA to tie rules on E15, ethanol credits

Source: By Marc Heller, E&E News reporter • Posted: Wednesday, February 13, 2019

EPA will combine its proposal to expand sales of higher ethanol fuel with recommendations for changes in the system of renewable fuel credits, despite calls from the ethanol industry to take up the issues separately.

The move, which Assistant Administrator of the Office of Air and Radiation Bill Wehrum revealed today, means the agency is sticking with a plan it announced months ago. And it’s an indication the Trump administration believes the partial government shutdown hasn’t derailed efforts to make E15 fuel available this summer.

“EPA is moving forward with a notice and comment rule that will include both E15 RVP and RIN market reform as the president has instructed us to do. This will be done in one regulatory package released at one time with a target of completion by the start of summer driving season,” Wehrum said in a statement.

The forthcoming measure reflects top priorities for competing industries. Ethanol groups have been pushing for E15, which is 15 percent ethanol, while petroleum refiners have lobbied for a revamp of the renewable fuel credits they buy to show compliance with the federal renewable fuel standard.

Wehrum’s comments followed rumors that EPA might be leaning toward considering the issues separately, which would have been a blow to petroleum groups. The partial government shutdown had fed speculation, especially after acting EPA Administrator Andrew Wheeler told a Senate panel that work had stopped on the E15 rule during the shutdown (Greenwire, Jan. 22).

In order to clear E15 for summer sales beginning June 1, EPA had said it would release a draft proposal this month. That would provide enough time for public comment before a final rule is published.

Before Wehrum’s comments, the vice president of regulatory affairs at the pro-ethanol group Growth Energy, Chris Bliley, pointed to President Trump’s support of E15 in calling on the agency to stay on track.

“The president has pledged to deliver E15 in time for the summer driving season, and we support any effort that helps EPA move forward on this fix to provide consumers with expanded access to a fuel that is already selling at 1,700 locations in 30 states,” Bliley said. “We look forward to working with EPA to get E15 over the finish line by June 1.”

Ethanol groups said making E15 available year-round would give service stations that haven’t offered it an incentive to start doing so.

The renewable fuel credits, on the other hand, have been a point of contention for petroleum companies, which say the high cost in recent years hurt small refiners. Critics, including in the ethanol industry, say the system of credits — called Renewable Identification Numbers, or RINs — isn’t transparent and is vulnerable to fraud and abuse.

While those issues are playing out, EPA faces a new lawsuit on ethanol mandates. The National Wildlife Federation is taking the agency to court, saying it overlooked environmental threats in boosting biofuel volumes for this year.

NWF, represented by the environmental group Earthjustice, said EPA didn’t adequately consult with the Fish and Wildlife Service on impacts to endangered species, and it cited EPA’s own reports about some of the potential effects. In a court filing, NWF also said EPA has allowed land not previously planted with crops to be converted to biofuel production, a complaint ethanol groups say is exaggerated.