It’s Time for the RFS to get ‘Back on Track’

Source: By Bob Dinneen, Ethanol Producer Magazine • Posted: Tuesday, May 24, 2016

Since publishing the 2014-’16 renewable volume obligations (RVO) with reduced volumes last year, U.S. EPA officials repeatedly have said they want to get the renewable fuel standard (RFS) “back on track.” But what does that mean?

At several congressional hearings during the past few months, EPA has made it clear the agency believes it means meeting its annual deadlines. EPA statutorily is required to finalize the following year’s RVOs by Nov. 30 of the preceding year. The agency has not met that deadline since 2011.

EPA has stated quite plainly it plans to finalize the 2017 RVOs by the statutory deadline this year. All stakeholders would appreciate that, but only time will tell if the agency actually will meet the deadline.

The phrase “back on track” means something completely different to biofuel producers. For us, it means returning to congressional intent with respect to both volume and waiver authority. The RFS always was meant to be forward-looking. It was meant to drive marketplace change—investments in infrastructure and new technologies. It was intended to break Big Oil’s stranglehold on the transportation sector.

We were disappointed that EPA adopted Big Oil’s narrative in its final 2014-’16 RFS RVOs. The agency cited concern for the ethanol blend wall as justification for slashing volumes well under the statutory targets and used a twisted interpretation of its waiver authority.

However, EPA’s revisionist RFS policy would result in biofuels cannibalizing biofuels, fighting for a stagnant market without the tools Congress intended to eat away at oil’s monopoly.

RFA and other biofuel groups have taken EPA to court to challenge the agency’s interpretation of its waiver authority. As I said in remarks to the National Ethanol Conference earlier this year, “to implement their vision of the marketplace, EPA grossly misread the general waiver provisions of the law, conflating supply and demand, and deliberately ignoring 1.8 billion surplus RIN [renewable identification number] credits that represent an incredibly important component of available supply.”
EPA erroneously concluded that there was inadequate supply of renewable fuel to justify a waiver of the statutory requirements.

RFA is confident we will prevail in court. But in the meantime, we are hopeful getting the RFS “back on track” means returning to what Congress had always intended—a strong, robust program that incentivizes growth in both first- and-second generation biofuels. At the very least, that means issuing annual RVOs that match, if not exceed, the statutory targets.

It also means EPA adhering to the law and only using its general waiver authority if there is inadequate domestic renewable fuel supply or if implementation of the requirement would severely harm the economy or environment of a state, region or the U.S.

As we wait for EPA to issue its draft 2017 RVOs, we indeed share EPA’s goal of getting “back on track.” We just hope EPA and RFA are speaking the same language.