Producers fight back against oil groups on RFS 

Source: Amanda Peterka, E&E reporter • Posted: Friday, May 8, 2015

Biofuel producers today pushed back against oil trade groups that are calling on U.S. EPA to recognize the “blend wall” in its forthcoming proposal setting long-delayed renewable fuel requirements.

In a letter last week, the American Petroleum Institute and American Fuel & Petrochemical Manufacturers asked EPA to hold strong to the approach the agency took in its controversial proposal in late 2013 to roll back renewable fuel requirements for refiners (E&ENews PM, May 4).

Today, three biofuel companies and seven trade groups representing producers told EPA that the approach recommended by the oil groups would run contrary to law and stifle the domestic biofuels industry.

“You must either choose to reward the oil industry for refusing to fulfill its obligations under the law, or choose to get the renewable fuel standard (RFS) back on track,” the entities wrote to EPA Administrator Gina McCarthy.

EPA has not yet set the renewable fuel mandates for 2014 and beyond as required under the renewable fuel standard program.

The agency withdrew its proposal for the 2014 targets after receiving pushback from stakeholders; in the proposal, EPA had called for cuts to the mandates due to the technical limitations to adding more ethanol to the fuel system that are otherwise known as the blend wall.

Under a recent proposed settlement with the two oil trade groups, EPA agreed to release a new proposal setting the 2014 and 2015 mandates by June 1 and to issue final mandates by Nov. 30.

The agency says it will also release the 2016 mandates, as well as the 2017 RFS requirement for biodiesel, on the same June and November timeline (E&ENews PM, April 10).

EPA today confirmed that it has sent the proposed volumes to the White House Office of Management and Budget for an interagency review.

In their letter, the biofuel producers urged EPA to set robust targets that follow “the spirit and intent” of the renewable fuel standard that Congress passed in 2007. The RFS called for increasing levels of biofuels to be blended into petroleum gasoline and diesel.

EPA’s previous proposal — which relied on authority Congress gave the agency to reduce renewable fuel volumes if there’s an “inadequate domestic supply” — was a “flawed approach” that would have violated the Clean Air Act, they wrote.

“If EPA were to waive the RFS requirements based on the notion that the necessary infrastructure to distribute larger volumes of renewable fuel ‘doesn’t exist,'” they wrote, “the agency would eliminate the incentive created by the policy to expand renewable fuels distribution capabilities.”

Among the letter’s signatories were POET LLC and Abengoa Bioenergy, two large ethanol producers that opened cellulosic ethanol plants in the Midwest last year. Cellulosic ethanol is an advanced biofuel under the RFS program that has a lower carbon dioxide footprint than corn ethanol and is made from non-food plants such as agricultural residue and grasses.

“It remains hard to believe that they would overtly choose [the] API course over that contained in the RFS itself and endorsed by nearly the entire cellulosic industry, which makes the lowest carbon fuel in the world,” said Brooke Coleman, executive director of the Advanced Ethanol Council, which also signed the letter.

In a statement, EPA spokeswoman Liz Purchia today said the Obama administration remains committed to biofuels and the RFS.

“The agency is committed to issuing the proposals by June 1 and finalizing volume standards by the end of this year, so we can provide for long-term growth of renewable fuels,” Purchia said. “Biofuels are an important part of the president’s energy strategy, helping to curb our dependence on foreign oil, cut carbon pollution and drive innovation.”