Last week, the Renewable Fuels Association (RFA) provided comments to the Environmental Protection Agency (EPA) on its Renewable Fuel Standard (RFS) proposed rulemaking for 2012. In 16 pages of comments, the RFA addressed both the proposed levels of renewable fuel use for 2012 as offered by EPA as well as reissued calls for EPA to address fundamental problems it created when crafting the RFS.
“Ensuring the integrity the RFS is strengthened and the intent with which Congress created it is honored is absolutely critical to the growth and evolution of domestic ethanol production,” said RFA President and CEO Bob Dinneen. “EPA officials have done yeomen’s work to get this groundbreaking program up and running, but work still remains. The RFA is committed to working with EPA to make sure the RFS, and the implementation of E15 to help refiners meet the RFS requirements, are successful.”
Three key areas of focus in the RFA comments included the cellulosic biofuel requirements of the 2012 RFS, the “small refiner” de facto waiver issued by EPA, and the continued inclusion of indirect land use change penalties against corn-based ethanol despite reams of scientific data proving EPA’s data and modeling are out-of-date, to say the very least. A summary of these key areas is as follows:
1. “EPA should finalize the 2012 cellulosic biofuel standard at the high end of the proposed range and should reject any suggestion that future annual cellulosic biofuel standards be based on past production levels.”
The RFA is urging EPA to set the cellulosic biofuel standard at the high end of the range it proposed – some 15.7 ethanol-equivalent gallons (EEG). Setting the standard in this aggressive manner “provides a strong policy signal that will support development of cellulosic biofuel technology. By setting the standard near the high end of expected industry production, EPA will provide certainty to projects under development and assist the industry in meeting the increased production requirements of the RFS2 over time,” the RFA wrote.
2. “Because the proposed ‘small refiner exemption’ actions are inconsistent with the statutory requirements and the RVO requirements, EPA should take appropriate steps to ensure that the total RVO is maintained for both 2011 and 2012.”
The issue here is a May 2011 ruling by EPA that exempted 13 of the nation’s 18 smallest refineriess from being obligated under the volume requirements of the RFS. All told, this represents 3.27 billion gallons of fuel, or 327 million gallons of ethanol market at the standard 10% ethanol blend. Under EPA’s May 2011 decision, it did not reallocate those gallons to other obligated parties, such as larger refineries. This action by EPA amounts to a waiver of the RFS outside of the very specific language instructing EPA on how it can waive RFS requirements. The RFA suggests a number of changes to this process, including allowing for public comment and transparency, as well as making sure the volumes “waived” by EPA are recovered elsewhere in the market.
3. “RFA strongly encourages EPA to re-evaluate and refine the indirect land use change (ILUC) analysis that was conducted for the RFS2 Final Rule, taking into account newly available studies, modeling results and data.”
The RFA has criticized EPA’s inclusion of so-called ILUC penalties against corn-based ethanol since it was first proposed by EPA in its RFS2 rulemaking in 2008. As pointed out in RFA comments, several new scientific analyses have been completed that better demonstrate to what extent, if any, such land use changes are occurring and those factors that are responsible for such changes. As such, the RFA strongly encourages EPA “to honor its commitment to reassessing its own lifecycle GHG analysis based on advances in the science. The agency should evaluate the new studies referenced herein and develop plans to revise its lifecycle GHG analysis to reflect the best available science.
RFA’s comments also addressed a number of technical changes proposed by EPA as well as market-expanding issues such as the Renewable Identity Number (RIN) carry-over precisions from year to year. The entirety of RFA’s comments can be read here.