EPA’s Volume Rule a Wake-Up Call for Ethanol Industry

Source: By Nebraska Ethanol Board and Clean Fuels Development Coalition • Posted: Wednesday, December 2, 2015

LINCOLN, Neb. – The U.S. Environmental Protection Agency’s decision to limit the volume of biofuels allowed under the Renewable Fuels Standard (RFS) is a “wake-up call” that biofuels must move beyond government imposed limits and establish new value based on performance and environmental benefits, according to several industry organizations.

In a call with reporters today, Todd Sneller, Nebraska Ethanol Board administrator and Clean Fuels Development Coalition (CFDC) chairman, said EPA’s final rule for 2014 and 2015 was “disappointing but not unexpected.” The rule essentially caps biofuels at 10 percent of the market under the RFS program but there is no legal limit to use more ethanol, biodiesel or other renewables. Although part of this rule, the proposed volumes for 2016, is not finalized.

“The RFS was, and remains, a foundation to provide a solid base for biofuels to continue to develop,” Sneller said. “All this means is EPA will limit the amount of biofuels they intend to manage under this particular program. Ethanol’s high octane and cleaner-burning properties make it an extremely valuable fuel and we expect increasing demand for those reasons.”

Under the RFS, a volume requirement is established by EPA that translates to a percentage. A refiner, for example, as an obligated party is required to meet that percentage in the fuels they provide. Sneller noted that once that obligation is met, additional volumes of ethanol, biodiesel and other renewable fuel can be used on a discretionary basis. By design the RFS volume requirement is a floor and not a ceiling. However, Sneller said the RFS has been viewed as the only factor driving demand and therefore labeled a cap.

“Our challenge and wake-up call is to provide a valuable product that does not depend on levels established by the EPA,” said Doug Durante, CFDC executive director. “We continue to be alarmed as we learn more about the harmful effects of gasoline-related emissions. Ethanol replaces and dilutes toxic, carcinogenic compounds in gasoline and provides a healthier alternative.”

Although the EPA has chosen to limit the amount of fuels like ethanol under the RFS, Durante said the EPA can facilitate access to new markets and increase biofuel demand by limiting toxic compounds in gasoline, which the agency is required to do under the Clean Air Act.

“Our biofuels reduce carbon, sulfur and toxics, and our producers can make plenty more ethanol,” Durante said. “We will work to provide access to the market and move beyond the RFS.”