White House wraps up review of 2013 renewable fuels targets

Source: Amanda Peterka, E&E reporter • Posted: Friday, February 1, 2013

The White House has finished reviewing two rules that would set this year’s biofuel requirements and create a program to address fraud in the biodiesel credit marketplace.

The Office of Management and Budget finished its reviews yesterday, setting the stage for a U.S. EPA release that could come as early as this afternoon.

At issue are 2013 volume requirements for corn-based ethanol and advanced biofuels, which EPA is required to set each year under the renewable fuel standard. The numbers represent how much of the fuels must be blended into the nation’s petroleum-based gasoline supply throughout the year; refiners also have the option of hitting the targets through the purchase of fuel credits.

EPA sent the rule to the White House for review in July, during the height of the drought that crippled the Corn Belt and spurred detractors to demand that the agency reduce corn ethanol requirements. The renewable fuel standard passed by Congress in 2007 requires that the nation blend 13.8 billion gallons of corn ethanol in 2013, up from 13.2 billion gallons in 2012, though EPA is given leeway in setting the targets.

The number for cellulosic biofuel, or fuel made from plant-based materials with lignocellulosic components, is also being closely watched by the industry. Last week, a federal court ordered EPA to revise its 2012 cellulosic requirement of 8.65 million gallons, finding that the agency’s methodology in calculating it was not accurate enough (Greenwire, Jan. 25).

According to EPA data, biofuel producers last year generated 22,000 gallons of cellulosic fuels, though the industry is poised to produce more this coming year as several cellulosic companies bring plants online.

OMB yesterday also finished a two-month review of a quality assurance program that is meant to address fraud in the biodiesel fuel credit marketplace.

According to a draft of the plan released in November, EPA would authorize third-party auditors to certify that Renewable Identification Numbers, or the 38-digit unique numbers tied to gallons of biofuels, are valid. Refiners that purchase those certified RINs would be protected from penalty if those credits later turn out to be fraudulent (Greenwire, Nov. 1, 2012).

In three separate instances over the past year and a half, individuals sold millions of the credits for biodiesel gallons that did not exist. Refiners purchased those credits to comply with their obligations under the renewable fuel standard.

Over the past several months, the refining industry has faulted EPA for delays in issuing the quality assurance program, complaining that they have had to shell out millions of dollars to conduct due diligence before purchasing credits. The agency had planned to issue a proposed rule before the end of last year.