EPA releases 2020 RFS numbers, leaves biofuel proponents underwhelmed

The U.S. Environmental Protection Agency (EPA) released its final renewable volume obligations (RVOs) under the Renewable Fuel Standard (RFS) for the year 2020 on Dec. 19.

“Through President Trump’s leadership, this Administration continues to promote domestic ethanol and biodiesel production, supporting our Nation’s farmers and providing greater energy security,” said  Andrew Wheeler, EPA Administrator. “President Trump committed to our nation’s farmers that biofuel requirements would be expanded in 2020. At the EPA we are delivering on that promise and ensuring a net of 15 billion gallons of conventional biofuel are blended into the nation’s fuel supply.”

Under the Trump Administration, EPA has increased the renewable volume obligations and continued to expand the nation’s renewable fuels sector. Through this rule, EPA has modified the RFS program by projecting small refinery relief to ensure that these final volumes are met, while adjudicating small refinery relief when appropriate. As proposed, the EPA finalized a projection methodology based on the 2016-2018 annual average of exempted volumes had EPA strictly followed the Department of Energy (DOE) recommendations of 770 million Renewable Identification Numbers (RINs) in those years, including granting 50% relief where DOE recommended 50% relief. This will be EPA’s general approach to adjudicating Small Refinery Exemption (SRE) petitions going forward, Wheeler indicated. By proposing effectively 15.8 billion gallons for 2020 the EPA plans to meet the target of 15 billion gallons.

The key elements of the EPA action on the RFS include:
• “Conventional” biofuel volumes, primarily met by corn ethanol, will be maintained at the 15 billion gallon target set by Congress for 2020.
• Cellulosic biofuel volumes for 2020, and thus advanced biofuel volumes, will increase by almost 170 million gallons over the 2019 standard.
• Biomass-based diesel volumes for 2021 will be equivalent to the standard for 2020, still more than double the statutory requirement.
• EPA will closely examine the labeling requirements for E15 fuel and move forward with clarifying regulations as needed.
• EPA has modified the way RFS obligations are determined to better ensure that these volumes are met, while still allowing for relief for small refineries consistent with the direction provided by Congress under the statute. By proposing effectively 15. 8 billion gallons it will net out at 15 billion.

Ethanol proponents are “underwhelmed” with the measures. As outlined in a supplemental proposed rule in October, the RVOs will account for a portion of the 4 billion gallons of demand for biofuels eliminated over the past three years due to the SREs that had been inappropriately granted in the estimation of critics.  The final rule’s use of a three-year average of DOE recommended waivers as an estimate for 2020 waivers, rather than an average of actual gallons waived by the EPA, is too little to address the issue, according to the National Corn Growers Association. Using the actual gallons waived would have increased the amount of biofuels in the transportation sector by approximately 1.35 billion gallons per year, while the DOE estimate used will increase it by just 770 million gallons.

“The Administration has chosen to move forward with a final rule that corn farmers believe falls short of adequately addressing the demand destruction caused by EPA’s abuse of RFS refinery waivers,” said Kevin Ross, president of the National Corn Growers Association. “While using the DOE recommendations to account for waivers is an improvement over the status quo, it is now on corn farmers to hold the Administration to their commitment of a minimum of 15 billion gallon volume, as the law requires. We will use future rulemakings and other opportunities to hold the EPA accountable.”

National Farmers Union (NFU) too was disappointed with EPA’s proposal and urged the agency to account for all 4 billion gallons worth of demand in the final rule.

“Family farmers are sick and tired of this biofuels bait and switch. Long before he was elected, President Trump promised to support the American ethanol industry, yet his EPA has done nothing but undermine its success. By indiscriminately granting so-called ‘hardship exemptions’ to multi-billion-dollar oil corporations, this administration has cost hardworking family farmers billions of dollars in lost sales, eliminated thousands of jobs, and slowed economic growth in rural communities across the country,” said Rob Larew, NFU Vice President of Public Policy and Communications.“In response to farmers’ appropriate anger, President Trump made another promise to undo the needless damage caused by the EPA — yet another promise he hasn’t kept with today’s RVOs. This meager solution falls significantly short of the relief the biofuels industry needs to recover from three years of outright sabotage.”

The National Biodiesel Board (NBB) also expressed its disappointment with the measures. The rule maintains the 2020 overall advanced volume and 2021 biomass-based diesel volume at the same levels as the current year, blocking growth for the biodiesel industry.

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