EPA’s RFS targets stir discontent among industry, greens

Source: By Niina Heikkinen, E&E reporter • Posted: Tuesday, June 2, 2015

After experiencing many months of delays, the biofuel industry had mixed responses to U.S. EPA’s proposed volume requirements under the renewable fuel standard (RFS).

Friday’s long-anticipated announcement included renewable fuel volume requirements for 2014, 2015 and 2016, with biomass-based diesel requirements for 2017. If the requirements are approved, total fuel volumes will go up 9 percent, or 1.5 billion gallons, from 2014 levels to 2016.

Janet McCabe, acting assistant administrator for EPA’s Office of Air and Radiation, described the proposal in a press call as promoting “ambitious but responsible growth” of renewable fuel and balancing the intent of the RFS with current capacity to increase biofuel production.

While some stakeholders expressed guarded optimism that EPA had provided specific target volumes for renewable fuels, many said the proposals fell far short of what they had hoped for.

“The proposal is a significant step in the right direction,” said National Biodiesel Board CEO Joe Jobe in a statement. “It is not perfect, but it gets the U.S. biodiesel industry going again and puts people back to work.”

Biodiesel volumes are expected to go up 17 percent, from 1.63 billion gallons in 2014 to 1.9 billion gallons in 2017. The National Biodiesel Board had pushed for much greater growth of 2.7 billion gallons by 2017 and still plans to seek higher targets in the coming months, according to Jobe.

‘Worse for the climate than gasoline’?

Others were sharply critical that the proposed volumes for the four categories of renewable fuels were below those outlined in the Energy Independence and Security Act (EISA) of 2007.

“Any reduction below statutory targets is not helping the industry,” said Mark Riedy, a partner at Kilpatrick Townsend, who represents renewable energy clients. “It doesn’t seem like the administration is walking the talk on being pro-renewable energy.”

If EPA’s proposed volumes had met the statutory targets outlined in EISA, the renewable fuel industry would have been able to grow much faster and would provide more confidence to those in the equity and debt industry to fund emerging advanced biofuel projects, he said.

The president of the biotechnology company Novozymes also objected to the more gradual volume increases.

“During the comment period, we urged the Administration to rethink its approach and support an existing law that works: the Renewable Fuel Standard,” said Adam Monroe in a statement. “If America does not capitalize on the benefits of home-grown fuel, other countries will, in fact they already are.”

Although the changes increased advanced biofuels by 27 percent from 2014 to 2016, some critics maintain that the increase of corn ethanol volumes from 13.4 billion gallons this year to 14 billion gallons in 2016 will end up increasing greenhouse gas emissions instead of reducing them (Greenwire, May 29).

Emily Cassidy, a research analyst for the Environmental Working Group, described corn ethanol as “worse for the climate than gasoline,” because of the greenhouse gas emissions associated with land conversion to grow more corn. Instead of more corn ethanol, Cassidy said, a greater focus should be placed on capturing energy from municipal solid waste and energy crops, like switchgrass.

However, Rob Jackson, a professor at Stanford University’s School of Earth, Energy and Environmental Sciences, refuted Cassidy’s assessment. The amount of time it would take corn ethanol to “pay back” the emissions from land conversion varies widely depending on where crops are grown. Generally, though, corn ethanol policy still has a greenhouse gas benefit, he said.

“People want to view corn ethanol as a climate savior or an environmental villain, and like most things, it’s somewhere in the middle,” Jackson said.