Mixed reviews for new RFS numbers

The Environmental Protection Agency released its draft set rule for the Renewable Fuel Standard on Dec. 1, which sets blending volumes for 2023, 2024, and 2025. The RFS requires annual volumes of renewable fuels, such as ethanol, be used in the fuel supply to reduce emissions, expand and diversify the fuel supply, improve energy security and lower costs.

The proposed requirements were disappointing to soy growers, who had expecting stronger numbers for biofuels but viewed as positive by corn growers from an ethanol standpoint

“We are pleased with EPA’s forward-looking approach of annual increases in the proposal,” said Tom Haag, president of the National Corn Growers Association. “EPA clearly recognizes that renewable fuels like ethanol play a critical role in cutting greenhouse gas emissions, increasing U.S. energy independence and providing long-term relief to consumers at the pump. With continued pressure on energy security and costs and the need to accelerate carbon emission reductions, biofuels can contribute even more, and we will make that case to EPA for the final volumes.” 

For 2023, EPA’s proposal includes an implied 15 billion gallons for conventional ethanol, which increases to 15.25 billion gallons for both 2024 and 2025. EPA also followed through on proposing to restore the remaining 250 million gallons from a prior court decision for 2023. EPA did not propose a specific update for lifecycle greenhouse gas assessments of biofuels but instead will take further comment and review options for a future update. Such an update is overdue and necessary to accurately reflect the shrinking carbon footprint of today’s ethanol, and NCGA will continue urging EPA to adopt the Department of Energy’s data-driven assessment.

The 2023-2025 proposal is EPA’s first RFS volume rule based on qualitative environmental, economic and agriculture factors listed in the statute, rather than specific volumes in law, which afforded EPA greater latitude in proposing these annual requirements within certain guardrails. As such, EPA builds on the strong baseline of the 2022 RFS volumes, which included the full statutory 15 billion gallons for ethanol, providing for future growth with this proposal.

Soybean farmers were initially pleased with EPA’s 2022 volume target — which included the highest-ever number for total renewable fuels and specifically for biomass-based diesel (BBD) since the renewable fuel standard was created — and hopeful EPA would stay the course. However, the Dec. 1 numbers released by EPA show a reversal rather than affirmation of its commitment to BBD. Even more, EPA has proposed halting any growth for advanced biofuels outside of BBD and cellulosic biofuels. The multi-year set rule was intended to provide more certainty for the biofuels industry and encourage investment and innovation. ASA is concerned the insignificant volume increases for 2023-2025 realistically could stifle growth and jeopardize the existing biofuels industry.

“America’s farmers have committed to the renewable fuels industry while continuing to provide the feed and food our country and other countries must have. Billions of dollars have gone into building and growing the infrastructure needed to support this industry. And our president has made a clear commitment to mitigating climate change and lowering greenhouse gas emissions — the very tenets of the RFS,” said Brad Doyle, ASA president. “And, yet, this draft rule slams the brakes on progress being made in biofuels investment and growth. Instead of continuing to support available, low-emission plant-based fuel sources, EPA has changed course and seemingly is ignoring the major investments in and consumer demand for biomass-based diesel and other biofuels that exists right now.” 

Through a consent decree submitted by EPA and Growth Energy, EPA is required to release the final set rule by June 14, 2023. EPA will solicit public comment on the proposed rule and hold a public hearing in January.