Industry derides EPA’s ‘status quo’ proposals for 2019

Source: Marc Heller, E&E News reporter • Posted: Wednesday, June 27, 2018

EPA yesterday proposed to increase the amount of cellulosic and advanced biofuels in the nation’s fuel supply but left overall renewable volumes about steady in its annual announcement on the renewable fuel standard.

The agency proposed total renewable fuel volumes of 19.88 billion gallons for 2019, up from 19.29 billion this year.

Mandated volumes of cellulosic ethanol would climb from 288 million gallons to 381 million gallons. Advanced biofuel would increase from 4.29 billion gallons to 4.88 billion gallons.

EPA proposed increasing biomass-based diesel from 2.1 billion gallons to 2.43 billion gallons in 2020; those volumes are set two years in advance.

Implied conventional biofuel — corn-based ethanol, primarily — would remain steady at 15 billion gallons, EPA said.

In a notice accompanying the announcement, EPA said it projects a 90-million-gallon increase in cellulosic ethanol production in 2019.

The proposal fell flat with the Iowa Renewable Fuels Association, which called it a status quo effort despite the increase in some categories.

While the group praised EPA for supporting advanced biofuel, it pointed to the agency’s RFS waivers for small refineries as a continuing challenge in boosting ethanol volumes.

Those waivers have at times been issued against recommendations by the Department of Energy, Reuters reported, leading to further outcry by ethanol advocates who say they are fed up with Administrator Scott Pruitt’s stances on biofuels.

“This is a status quo proposal for ethanol and the status quo is bad,” said IRFA Executive Director Monte Shaw in a statement. “The ethanol number isn’t worth the paper it’s written on so long as Scott Pruitt is granting small refinery exemptions left and right — even beyond what the Department of Energy recommends.”

The Advanced Biofuels Association said the increases for advanced fuels would help companies slated to come online with new facilities and which are looking for signs the government is committed to that aspect of the RFS.

“Additional cellulosic facilities are scheduled to come online in the near future, and we are pleased to see an RVO that will ensure a market for these new gallons,” said ABA President Michael McAdams.

‘Broken government program’

EPA’s proposal fell short of earlier predictions in the industry that Pruitt would reallocate biofuel requirements waived for small refineries to larger ones.

The American Petroleum Institute said the RFS remains a program in need of reform, although the group found a bright spot in the agency’s decision not to reallocate the waived biofuel volumes.

“EPA made the right call in not reallocating the waived small refiner exemption volumes, however the agency’s latest proposal for 2019 is yet another example — in fact it’s an annual example of a broken government program that needs a comprehensive legislative solution that includes the sunset of the program,” said Frank Macchiarola, API’s group director for downstream and industry operations, in a statement.

The Renewable Fuels Association called the reallocation proposal “superficial and toothless” and said it reflected Pruitt’s anti-ethanol stance.

The agency signaled that a close examination of renewable fuel credits is underway and that changes are being considered. EPA asked for public comment on potential changes to the market for those credits, also known as renewable identification numbers, or RINs.

“EPA is currently considering a handful of ideas, including: prohibiting parties other than obligated parties from purchasing separated RINs; requiring public disclosure if a party holds a certain percentage of the RIN market; and/or requiring obligated parties to retire RINs for compliance purposes on a more frequent basis (e.g., requiring monthly compliance),” the agency said in its published notice.

“EPA requests comment on the expected impact that these specific potential regulatory changes could have on the RIN market, positively or negatively, as well as on any other potential regulatory changes commenters may recommend to address perceived vulnerabilities in the RIN market,” the agency said.

The Biomass Power Association, pressing for recognition of biomass-driven electricity in the renewable fuel standard, said it was disappointed EPA hadn’t done so.