RFS, Tax Extenders, Rail Safety among Issues of Focus for Remainder of Year

Source: By Rachel Gantz, OPIS • Posted: Friday, September 4, 2015

Congress returns next week from its month-long August recess and fall is around the corner. With only a handful of months remaining in the year, there are still several outstanding legislative and regulatory biofuel-related issues yet to be addressed.

The most anticipated issue is EPA’s finalized 2014-2016 Renewable Fuel Standard (RFS2). In late May, EPA released its proposal. As part of the proposal, the agency aims to scale back conventional biofuel targets to account for concern surrounding the ethanol blendwall, while calling for a greater amount of second- generation biofuels. A public comment period on the RFS proposal ended July 27, and EPA is expected to finalize the rule by Nov. 30. After several years of missing its statutory Nov. 30 deadline for issuing the annual RFS targets, EPA aims to get the agency “back on track”  in issuing the final rules by the late November deadline.

There is broad interest from biofuel, refining, environmental, food, livestock and taxpayer-related groups on the RFS, as evidenced by the 670,954 total comments EPA received on the proposed rule this summer.

Meantime, congressional efforts to reform or repeal the RFS appear in a holding pattern until EPA finalizes the rule. As OPIS reported last week, numerous sources confirmed that the issue isn’t on Congress’ agenda this fall, but could be next year once the final RFS targets are issued.

Among other biofuel-related issues of focus:
–Tax extenders: In July, the Senate Finance Committee approved its tax extenders package that among other provisions extends the $1/gal biodiesel tax credit and the $1.01/gal cellulosic ethanol tax credit through 2016. The package is a straight, two-year extension of numerous tax provisions that expired at the end of 2014. However, an amendment was approved to the bill that would convert the biodiesel tax credit to a producers’ tax credit, beginning Jan. 1, 2016, for fuel produced by a taxpayer in the U.S. The tax package has not yet been scheduled on the full Senate for a vote, and there is no word on when the House Ways and Means Committee will draft its version of the bill or hold a vote on the package.

–Rail safety: There have been several rules issued in response to a series of rail accidents by trains shipping ethanol, crude and other hazardous materials.  The most notable accident was a derailment in the town of Lac-Megantic, Quebec, Canada, on July 6, 2013 involving tank cars loaded with crude, which resulted in more than 40 fatalities. That incident was caused by a rolling unattended railcar. Several rail-related rules have been issued, with a handful that are still pending in Congress, including the Hazardous Materials Rail Transportation Safety Improvement Act of 2015, introduced in the Senate, that would speed up the phasing-out of older tank cars in an effort to reduce potential risks to communities near railroads and an Emergency Order (currently in its second round of the open comment period before it is sent to the Office of Management and Budget) that establishes a maximum of 40 mph for trains transporting Class 3 flammable liquids.