The EPA proposed a 10 percent increase, mostly reserved for cleaner-burning “advanced” biofuels, over three years in the federal mandate to mix biofuels into the U.S. gasoline supply, and said it would expand the Renewable Fuel Standard to include electricity generated from biogas and used in electric vehicles. The proposal, announced Thursday, would mean greater use of E15 and other blends of corn ethanol above the traditional 10 percent, said ethanol groups, which applauded the proposal.
“With this proposal, EPA seeks to provide consumers with more options while diversifying our nation’s energy mix,” said EPA administrator Michael Regan. “The Renewable Fuel Standard program is critical to helping incorporate more homegrown biofuels into the market.”
It was the first time the EPA proposed a multiyear RFS and the first time the agency had a free hand in drafting the targets within the parameters of clean air laws. Until now, the annual targets were specified by statute, although the EPA could adjust them. “The RFS program is entering a new phase, and we are introducing a new regulatory program governing renewable electricity,” said the EPA in its 692-page proposal.
Corn ethanol would remain the nation’s primary biofuel under the proposal. It would be allotted 15.25 billion gallons of the RFS in 2024 and 2025, compared to the current 15 billion gallons. Second-generation biofuels, such as biodiesel and cellulosic ethanol, would account for 7.43 billion gallons of the RFS in 2025, up from this year’s 5.63 billion gallons.
Ethanol trade groups, including Growth Energy and the Renewable Fuels Association, said the proposed RFS assured steady growth for the sector. RFA chief executive Geoff Cooper said the EPA proposal “puts the RFS into overdrive,” although the share allotted to corn ethanol would increase hardly at all. “If the demand is there … we’ll produce more than that,” he said.
During a teleconference, Cooper said the proposed RFS “will stimulate the marketplace to expand its offerings” of E15, E85 and other higher blends of ethanol into gasoline because refiners could not satisfy the RFS with the traditional 10 percent blend. U.S. gasoline consumption totaled 134.8 billion gallons in 2021.
The EPA shortchanged biodiesel and renewable diesel, the mainstays of the advanced biofuels industry, said the Clean Fuels Alliance America. The RFS for biomass diesel would be 2.95 billion gallons in 2025, an increase of just 190 million gallons from this year. Some 3.1 billion gallons of biomass diesel were sold last year, said the trade group, and usage is expected to grow by more than 500 million gallons in 2023. “The [proposed] volumes provide no additional space for sustainable aviation fuel and short-circuit the nation’s goals to cut carbon emissions.”
Under the EPA proposal, renewable electricity would become part of the RFS at the start of 2024. “The regulations … address a number of important areas, including which parties can generate eRINs, prevention of double counting, and data requirements for valid eRIN generation,” said the EPA, referring to the electric version of RINs, the credits that are generated with the production of a gallon of biofuel. “The proposed changes are intended to provide clarity on how electricity would be incorporated into the RFS so that the existing RIN-generating pathway can be effectively utilized in a manner that ensures RINs are generated only for qualifying electricity.”
In addition, the EPA proposed a revision of the equivalence value for renewable electricity, to change it to 6.5 kilowatt-hours per RIN from the current 22.6 kWh/RIN. “We believe that this change would more accurately represent the use of electricity as a transportation fuel relative to the production of biogas.” A kilowatt-hour is a measure of energy use. For example, an electric blanket uses about one kilowatt-hour per night.
The eRIN proposal would apply only to biomass and would exclude wind, solar, and other renewable sources of electricity, noted agricultural economist Aaron Smith of UC-Davis on social media. Smith said “the big news in EPA’s proposed biofuel rules” was the section on electricity.
It was unclear how large a market there would be in the use of renewable electricity to power electric vehicles. “The inclusion of eRINs into the [RFS] program affords another opportunity for dramatic growth of cellulosic biofuel,” said the EPA. Cellulosic biofuels are now a minor part of U.S. biofuel production. The RFS for cellulosic biofuels was 630 million gallons this year.
“Renewable fuels have been a tremendous success story for our country and our rural economy,” said Zippy Duvall, president of the American Farm Bureau Federation.
The EPA said it would hold a public hearing on the proposal on Jan. 10, extending it to Jan. 11, if necessary.
To read the RFS proposal, click here.
To read the draft regulatory analysis, click here.