With time running out to set the ethanol mandate for this year, EPA said it “is not in a position to finalize the 2014 RFS standards rule before the end of the year. Accordingly, we intend to take action on the 2014 standards rule in 2015 prior to or in conjunction with action on the 2015 standards rule.” EPA proposed a relaxation in the 2014 mandate nearly a year ago, saying the gasoline market was nearly saturated with biofuels at the traditional blend rate of 10 percent, partly because fuel usage is lower than expected.
The trade group Renewable Fuels Association said, by delaying action, EPA was “walking away from a proposed rule that was wrong on the law, wrong on the market impacts, wrong for innovation and wrong for consumers.” The oil industry group American Petroleum Institute said the EPA delay showed the so-called Renewable Fuels Standard “has become completely unworkable and must be repealed.” The National Chicken Council said the continued success of ethanol makers was proof the RFS is no longer needed. Livestock groups blame the RFS for driving up feed costs.
The 2007 energy law called for ever-increasing amounts of corn-based ethanol to be used in gasoline – 13.8 billion gallons in 2013 and 14.4 billion gallons this year, for example – to plateau at 15 billion gallons annually into the future. Meanwhile, advanced biofuels, such as biodiesel and fuels derived from wood and grasses, were to grow in volume; the target for this year is 3.75 billion gallons with an ultimate goal of 21 billion gallons in 2022. The advanced biofuels sector has fallen far short of those goals but three large-scale two commercial-scale biorefineries came on line this year.
Senate Agriculture chairwoman Debbie Stabenow said, “The EPA needs to work toward a new rule in 2015 that will provide long-term certainty needed for the advanced biofuels industry to give real competition to Big Oil at the gas pump.”
Corn-based ethanol would have been guaranteed a market share of around 13 billion gallons for 2014 under the EPA proposal unveiled last Nov 29. Since then, EPA officials have said the mandate would reflect an upturn in fuel demand.
The EPA announcement in the Federal Register is available here.