The RFS and the Advanced Fuels Pathways Backlog

Source: By Jessie Stolark. EESI • Posted: Monday, August 18, 2014

A long-awaited decision from the Obama administration regarding the 2014 Renewable Fuel Standard (RFS) fuel volumes is expected in September.  In the interim, speculation continues about the final volume levels and if the announcement will be further delayed. Just this Tuesday, Senator Chuck Grassley (R-IA) mused to reporters that silence from the administration leads him to believe that the 2014 volumes will not be announced until after the mid-term elections.  Since the proposal – to reduce the 2014 volumes by 2.94 billion gallons – was announced last November, the biofuels industry has been hyper-focused on the EPA’s proposed cuts. But there has been little discussion of the fuel pathway process, which certifies if a feedstock or production process qualifies as a renewable fuel.  With many feedstocks awaiting approval, could a streamlined pathways process increase advanced fuels production in the near-term?

Even if the 2014 biofuel volume cuts are partially reversed by the administration, the industry’s ability to meet the RFS volume mandates for advanced fuels has been called into question. This is not without cause, since cellulosic production volumes have not kept pace with volume mandates as laid out in the RFS.  However, four advanced cellulosic plants are poised to begin commercial production. The first of these, Poet DSM’s Project Liberty, is expected to begin full production on September 3.  Additionally, approximately 32 feedstock pathways are currently under consideration at EPA.  Eleven of these pending pathways could qualify as advanced biofuels, and include renewable diesel, biodiesel, drop-ins and other advanced fuels. Making sure that the RFS is successful not only depends on regulatory certainty regarding fuel volumes, but also a clear feedstock and technology pathway process.

New or significantly altered feedstocks and processes must be certified by the EPA to be eligible to receive Renewable Identification Numbers (RINs). In order to comply with the RFS, gasoline refiners must either blend renewable fuels or purchase RINs, thus creating an incentive for the development of renewable fuels.  Renewable fuels are certified by EPA using a lifecycle analysis which calculates the GHG reduction potential of a renewable fuel, relative to conventional gasoline.  Within the RFS, there are four nested fuel categories with ascending GHG reduction mandates: renewable fuel, advanced biofuel, biomass-based diesel, and cellulosic biofuel. Cellulosic biofuels has the highest bar to clear – it must meet reductions of 60 percent GHG emissions relative to gasoline.  The pathways process is lengthy, averaging 9 to 12 months between application and approval and sometimes much longer.  Only a handful of pathways have been approved so far this year, compared to 15 in 2013.  If higher volumes of advanced fuels are to be reached, additional pathways must be approved.

This backlog has been a source of consternation to the advanced renewable fuels industry.  According to Michael McAdams, President of the Advanced Biofuels Association, “The various RVO [Renewable Volume Obligate] numbers are important to the advanced and cellulosic industry; however, it is even more important for EPA to approve our companies for inclusion under the RFS program promptly.”  The EPA responded to the industry’s criticism on the pathways process in March by announcing efforts to streamline the process within six months.  Due to budgetary constraints, the EPA stated that it has in the meantime prioritized fuel pathways based on three criteria:

  • Pathways that could qualify for the cellulosic biofuel category, which have the greatest GHG reduction requirements,
  • Potential to reduce greenhouse gas emissions per gallon, and,
  • A pathway’s ability to contribute to “near-term increases in renewable fuel use.”

These goals, however, are at odds with EPA’s proposed 2014 reduction for biodiesel, the first commercial-scale advanced biofuel. EPA’s proposal would reduce the biodiesel mandate from 1.8 billion to 1.28 billion gallons, despite production levels of nearly 1.8 billion gallons last year.

Industry is also still waiting for decisions on woody feedstocks and renewable butanol, a drop-in fuel.  According to McAdams, “by delaying these companies participation in the RFS, EPA has put them at risk in the short-term and removed potential sustainable gallons to be counted towards the [fuel volume] targets.”  But is the EPA wholly to blame?  Others have cited the EPA’s willingness to work with industry on fuel pathways and the shared common goal between industry and EPA of continuing to lower the GHG intensity of renewable fuels.  Additionally, the pathways process is complicated, and EPA suggests that applicants apply as early as possible in feedstock development.  With a new pathways process expected next month, hopefully the process will be streamlined and the number of pending pathways reduced.

The proposed RFS reduction has had a chilling effect on advanced cellulosic investors and industry.  But the backlog of pending pathways, while vexing, shows hope for the near future.  It proves that there are many sustainable feedstocks and processes in development.  A streamlined pathways process is critical. Increasing the number of approved pathways has the potential to further diversify advanced renewable fuel feedstocks while providing additional gallons of advanced renewable fuel – achieving both the industry’s and EPA’s goal of diversified low-carbon fuels.

For more information see: 

Fuel Pathway Petitions: Overview, U.S. EPA

RFS announcement may not come until after November elections, Brownfield Ag News

Advanced Biofuels: Suspended in Bureaucratic Animation, BIofuels Digest

U.S. Renewable Fuel Standard: Fuel Pathways and Petitions, Biomass Magazine

EPA Biofuel Pathways and Petitions: Failure to Launch?, Farmdoc Daily