RFA asks EPA to use RFS ‘reset’ rule to reallocate waived RVOs

Source: By Erin Voegele, Ethanol Producer Magazine • Posted: Monday, February 4, 2019

The Renewable Fuels Association is calling on the U.S. EPA to use its upcoming Renewable Fuel Standard “reset” rule to reallocate renewable volume obligations (RVOs) impacted by recent small refinery exemptions, a 2016 lawsuit, and a recent bankruptcy settlement.

A notice released by the Trump Administration in October 2018 indicates the EPA is scheduled to release an RFS reset rule in early 2019 and finalize that rulemaking by the end of the year. The notice states that “under the statutory provisions of governing the [RFS] program, EPA is required to modify, or reset, the applicable volume targets specified in the statute for future years if waivers of those volumes in past years met certain specified thresholds. Those thresholds have been met or are expected to be met in the near future. As a result, EPA is proposing a rulemaking that will propose modifying the applicable volume targets for cellulosic biofuel, advanced biofuel, and total renewable fuel for the years 2020-2022.”

On Jan. 29, Geoff Cooper, president and CEO of the RFA, sent a letter to Acting EPA Administrator Andrew Wheeler in which he said the RFA expects the EPA will use the rest rule as an opportunity to adjust future implied blending obligations for conventional fuels upward to account for the 500 million gallons of renewable fuel improperly waived from the 2016 standards, as required by the D.C. Circuit Court of Appeals’ remand in Americans for Clean Energy v. EPA; the approximately 232 million renewable identification number (RIN) “write-off” as part of the Philadelphia Energy Solutions Refining and Marking LLC bankruptcy settlement; and the 2.25 billion RINs attributable to 48 small refinery exemptions granted for compliance years 2016 and 2017.

“As a result of these waivers or exemptions from required volumes, many ethanol plants have recently idled, shut down, or announced layoffs,” Cooper wrote. “These compliance exemptions have also hurt demand and price for American farmers. At a time when trade disputes are dampening export market opportunities, the EPA-induced disruption in domestic ethanol and corn demand is devastating.”

In his letter, Cooper notes that due to the exemptions he listed, the RFS—as implemented—has not achieved the applicable volume requirements set by the EPA in its annual rules. He also stressed that EPA has statutory mandate to ensure those volume requirements are met, noting that mandate can only be accomplished if EPA adjusts volumes upward to account for volume obligations previously exempted by EPA and not accounted for in the subsequent year’s volume requirement.

A full copy of the letter can be downloaded from the RFA’s website.

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