Official Review of Renewable Fuels Standard Volumes for 2017, 2018 Begins

Source: BY DTN/Progressive Farmer • Posted: Thursday, April 21, 2016

Newly proposed Renewable Fuels Standard volumes for 2017 and 2018 have been forwarded to the U.S. Office of Management and Budget for review, according to a posting on the OMB website Monday.

It is the last step before the U.S. Environmental Protection Agency issues the proposed standard. Such a review process can take up to 90 days but typically takes about 30 days. The numbers won’t be made public until after the review process is complete.

The EPA in recent years has been under fire from both the oil and ethanol industries for falling behind in releasing new RFS volumes.

To make up for some of that, EPA last fall released three years’ worth of volumes to run through 2016.

Last November, EPA announced a three-year program through 2016 that includes biofuels volumes below those set in the original 2007 law.

The agency also announced biomass-based diesel volumes through 2017. The overall RFS cuts came about as a result of overall decreased demand for gasoline, reflected in about a 20% reduction in overall biofuels volumes in the RFS.

EPA used a waiver rule to change the blend volumes required by petroleum marketers. Biofuels volumes are set in the final rule at 16.28 billion gallons for 2014, 16.93 billion gallons for 2015, and 18.11 billion gallons for 2016.

EPA’s earlier proposed numbers called for renewable blend volumes of 15.93 billion gallons in 2014, 16.3 billion gallons in 2015, and 17.4 billion gallons in 2016.

Under the original 2007 law, overall biofuels blending volumes would have been 18.15 billion gallons in 2014, 20.5 billion gallons in 2015 and 22.25 billion gallons in 2016.

The new rule issued in November lowered blend volumes from the law by 1.87 billion gallons for 2014, 3.57 billion gallons for 2015 and 4.14 billion gallons.

Corn-based ethanol volumes were set below the statutory 15 billion gallons for 2014 and 2015, at 13.57 billion and 13.93 billion gallons, respectively. The blend level was set at 14.27 billion gallons in 2016, although industry groups say producers are poised to produce at least 15 billion gallons.

EPA set cellulosic volumes at 33 million gallons for 2014, 123 million gallons for 2015, and 230 million gallons in 2016.

Much of the anticipation for the announcement centered on the cellulosic ethanol volumes.

For years, EPA has had to re-adjust the RFS volumes for cellulosic ethanol. The original 2007 statute called for 1.75 billion gallons in 2014, 3 billion gallons in 2015, and 4.25 billion gallons in 2016.

The final rule set the 2014 biodiesel volume at 1.63 billion gallons, or effectively the actual volume blended. That number rises to 1.73 billion for 2015, 1.9 billion gallons in 2016 and 2 billion gallons in 2017. The only adjustment EPA made from its proposal was increasing the 2015 number by 300 million gallons.

According to statute, the biomass-based diesel, or biodiesel, volumes are required to be set at a minimum of 1 billion gallons starting in 2012.

The biodiesel industry has seen production falter in the past year as a result of the expiration of the biodiesel blenders’ tax credit in December 2014. In the past couple of months, the industry has been pushing members of Congress to make changes to the credit to create more certainty in the market.

See the OMB post here:…