Two months behind schedule, the EPA has proposed targets for renewable fuel use in 2018 — corn-based ethanol will be in its usual place as the primary biofuel, at 15 billion gallons, and so-called advanced biofuels will sit at 4.24 billion gallons. The agency said it will begin the technical analysis that could lead to a permanently lower mandate for advanced biofuels, which are being produced in far smaller quantities than envisioned in a 2007 law.
Dating from 2005, the biofuels mandate, formally the Renewable Fuels Standard, has made homegrown fuel a major component of highway travel. Nearly all of the 143 billion gallons of gasoline used annually by cars and light trucks is 10 percent ethanol and 4 percent of the average gallon of diesel fuel comes from a renewable source.
When it passed the 2007 energy law, Congress aimed for a robust biofuels sector where cleaner-burning, second-generation renewable fuels would account for a majority of renewable fuel production. Conventional biofuels, essentially corn ethanol, would see a maximum mandate of 15 billion gallons while advanced biofuels would account for 21 billion gallons of the target of 36 billion gallons of biofuels in 2022. Instead, the EPA has reduced the RFS year after year because advanced biofuels, particularly cellulosic ethanol made from grasses and woody plants, have been slow to come to the market.
“We are proposing new volumes consistent with market realities focused on actual production and consumer demand while being cognizant of the challenges that exist in bringing advanced biofuels into the marketplace,” said EPA administrator Scott Pruitt. The proposed 4.24 billion gallons for advanced biofuels in 2018 is nearly identical to this year’s standard.
By law, the EPA can “re-set” the statutory targets for a biofuel if it reduces it by 50 percent for one year or by 20 percent for two consecutive years. Either trigger is easily met for advanced biofuels. The energy law anticipated production of nine billion gallons this year and 11 billion gallons in 2018. “In light of these requirements, the administrator has instructed EPA staff to initiate the required technical review to inform a re-set rule,” said the agency. Any re-set would be considered apart from the proposed RFS, which would become final in November under EPA’s timeline.
“It is important that the RFS continue to drive investment in new advanced and cellulosic biofuel technologies,” said Bob Dinneen of the Renewable Fuels Association, an ethanol trade group. Lowering the target for advanced biofuels “may weaken the signal to the marketplace,” he said.
The Advanced Biofuels Association said it “has long supported EPA’s efforts to match the … standards with actual production” although it was disappointed that the step was needed. “We are frustrated that some in the industry are hoping to use the RFS to eliminate international competition,” it said.
The EPA invited comments on how to assure the RFS promotes U.S. energy independence in the face of biofuel imports that climbed sharply in 2016 to 46 million gallons of ethanol and 731 million gallons of advanced biodiesel and renewable diesel. Should the biodiesel standard be reduced from the proposed level? it asked. While the ethanol standard is set just ahead of the coming calendar year, the biodiesel standard is announced more than a year in advance. The 2019 proposal for biodiesel is 2.1 billion gallons, the same as in 2018. The target is two billion gallons this year.
“This proposal continues to under-estimate the ability of the biomass-based diesel industry to meet the volumes of the RFS program,” said Anne Steckel of the trade group National Biodiesel Board. Steckel said biodiesel, which provides half of U.S. advanced biofuel output, deserves a larger share of the fuel market than offered by the EPA. The NBB said the RFS for advanced biofuels should be 5.25 billion gallons and EPA should tab biodiesel for 2.75 billion gallons in 2019. “The EPA should be committed to diversifying the diesel fuel market and prioritizing advanced biofuels,” said Steckel.
Soybean oil is the predominant feedstock for U.S. biodiesel. The American Soybean Association said EPA should increase its targets for biodiesel and advanced biofuels “to capitalize on the opportunity to boost domestic biodiesel production.” Otherwise, the EPA “would miss an opportunity to utilize surplus soybean oil to diversify our fuel supply and boost jobs, particularly in rural America,” said the farm group.
The oil industry said the resurgence in domestic oil and gas production has obviated the rationale for converting food crops and plants into fuel. It advocates repeal of the RFS, which boosts alternative fuels.
The EPA home page for the Renewable Fuel Standard is available here.