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EPA Announces Blending Mandates for 2023-2025; Industry Reacts

(WASHINGTON D.C.) — The Environmental Protection Agency on Wednesday finalized blending mandates in the Renewable Fuels Standard for 2023, 2024 and 2025; which left many in the biofuels industry disappointed.

EPA set overall biofuel volumes at 20.94 billion gallons in 2023, higher than the initial proposal earlier in the year of 20.82 billion gallons. However, EPA set lower targets for 2024 and 2025 than what was initially proposed with the target for 2024 at 21.54 billion gallons and 22.33 billion gallons for 2024.

The final numbers also show a 250 million gallon reduction in total corn-based ethanol volumes for 2024 and 2025; down from hat was originally proposed and set at 15 billion gallons for both years.

Many throughout the ethanol and biofuels industry have voiced their concern with the final numbers from EPA. You can view those remarks below and also read more from our partners at DTN/Progressive Farmer here: https://www.dtnpf.com/agriculture/web/ag/news/business-inputs/article/2023/06/21/epa-lowers-corn-ethanol-advanced-rfs

INDUSTRY REACTION BELOW:

Clean Fuels Slams EPA’s Final RFS Biomass-based Diesel Volumes

WASHINGTON, DC – Today, Clean Fuels Alliance America expressed extreme disappointment with the Environmental Protection Agency’s final Renewable Fuel Standards for 2023, 2024 and 2025. EPA finalized moderate increases in the biomass-based diesel and non-cellulosic advanced volumes each year but did not increase the overall renewable fuel market. EPA failed to change biomass-based diesel volumes for 2023 despite the rapid increase in U.S. production of biodiesel, renewable diesel and sustainable aviation fuel during the first months of the year.

“EPA is undercutting the certainty that our industry hoped for from a three-year RFS rule,” said Kurt Kovarik, Vice President of Federal Affairs with Clean Fuels. “U.S. clean fuel producers, oilseed processors, fuel distributors and marketers have all made significant investments to grow the industry rapidly over the next several years. The industry responded to signals from the Biden administration and Congress aiming to rapidly decarbonize U.S. fuel markets, particularly aviation, marine, and heavy-duty transport, and make clean fuels available to more consumers. The volumes EPA finalized today are not high enough to support those goals.”

“Clean Fuels appreciates the bipartisan support of Representatives, Senators and Governors who asked EPA to ensure that final volumes supported achievable, aggressive growth of advanced biofuel volumes,” Kovarik added. “It is a shame that EPA failed to fully consider the data provided by other federal agencies and industry experts demonstrating the upward trajectory of our industry.”

“Worst of all, EPA ignores the hundreds of millions of gallons of biodiesel, renewable diesel and sustainable aviation fuel generated in the first half of 2023,” Kovarik continued. “In past years when EPA set RFS volumes after the statutory deadline and after the compliance year is nearly half over, the agency properly accounted for available gallons and RINs.”

EPA’s Public Data for the Renewable Fuel Standard shows that qualifying biomass-based diesel production increased by more than 30% — or 400 million gallons – in the first five months of 2023, compared to the same period in 2022. The Energy Information Administration’s Short Term Energy Outlook for June 2023 projects increases in U.S. production of biodiesel and renewable diesel of more than 800 million gallons in 2023 and 900 million gallons in 2024. In the final rule released today, EPA increases RFS volumes for these fuels by only 590 million gallons over the three-year period: 60 million gallons in 2023, 220 million gallons in 2024, and 310 million gallons in 2025.

Growth Energy: EPA’s Final RFS Rule Undermines Low-Carbon Biofuel Growth Potential

WASHINGTON, D.C.— Growth Energy CEO Emily Skor issued the following statement after the U.S. Environmental Protection Agency (EPA) released its final renewable volume obligations (RVOs) for 2023-2025 under the Renewable Fuel Standard (RFS), also known as the Set.

“The RFS remains one of America’s most successful clean energy policies, but, yet again, its full potential as a climate solution remains untapped. EPA’s decision to lower its ambitions for conventional biofuels runs counter to the direction set by Congress and will needlessly slow progress toward this administration’s climate goals.

“We should be expanding market opportunities for higher blends like E15, not leaving carbon reductions on the table.

“While the final rule offers a modest improvement in advanced volumes, EPA inexplicably failed to extend that recognition to conventional biofuels. The bioethanol industry has more than adequate supply to meet the higher volumes that were originally proposed in December 2022. Choosing not to put that supply to good use in decarbonizing the transportation sector runs counter to this administration’s previously-stated commitments and undermines the goal of reaching net-zero by 2050.”

Background

Under the terms of a consent decree with Growth Energy, EPA was required to finalize the RVOs for 2023-2025 by June 14, 2023. At EPA’s request, Growth Energy consented to a one-week delay in the deadline and the final volumes were released publicly this morning.

In EPA’s final rule:

-Total RVO gallons increase by 1.37 billion gallons (BG) from 2023 to 2025.
-Total advanced D5 RIN gallons increase by 1.37BG from 2023 to 2025.
-Bio-based diesel D4 RIN gallons remain unchanged from the proposal in 2023.
-Cellulosic gallons reflect the removal of approximately 1.8BG of eRINs, which have been removed from the final rule, and the increase of non-eRIN cellulosic volumes, primarily for biogas.
-Total non-cellulosic advanced gallons increase by 850 million gallons (MG) between 2023 and 2025.
-Implied conventional gallons remain flat at 15BG each year of the proposal (with 250MG in 2023 for ACEI remand). Note that in EPA’s original proposal, conventional gallons would have increased to 15.25 BG in 2024 and 2025.

RFA: Final RVO Rule Fails to Deliver on Promise of Original Proposal

The 2023-2025 Renewable Fuel Standard volumes finalized today by the Environmental Protection Agency mark an unfortunate step backward from the volumes that were originally proposed, according to the Renewable Fuels Association.

EPA’s final rule includes conventional renewable fuel requirements of 15 billion gallons for both 2024 and 2025, down from the proposed volumes of 15.25 billion for both years. RFA called the reductions “inexplicable and unwarranted.”

“The RFS was intended to drive continual growth in all categories of renewable fuels well beyond 2022; instead, today’s final rule flatlines conventional renewable fuels at 15 billion gallons and misses a valuable opportunity to accelerate the energy sector’s transition to low- and zero-carbon fuels,” said RFA President and CEO Geoff Cooper. “By removing half a billion gallons of lower-carbon, lower-cost fuel, today’s rule needlessly forfeits an opportunity to further enhance U.S. energy security and provide more affordable options at the pump for American drivers.”

Despite the rule’s failure to finalize the strong proposed conventional renewable fuel volumes, the action “includes solid volumes for other renewable fuel categories and brings some stability and predictability to the marketplace for the next two and a half years,” Cooper said. “Despite the disappointing reduction in conventional renewable fuel numbers, we appreciate the fact that President Biden and EPA Administrator Michael Regan have continued to prioritize renewable fuels in our nation’s energy and climate strategy.”

EPA’s final rule includes a total volume obligation of 20.94 billion gallons for 2023, of which 15 billion gallons will come from conventional renewable fuels like corn ethanol. The rule also includes a supplemental volume requirement for 250 million gallons in 2023 to make up for illegally waived volumes in 2016. EPA finalized total volumes of 21.54 billion and 22.33 billion gallons in 2024 and 2025, respectively, with conventional renewable fuel requirements of 15 billion gallons for each of those two years.

RFA also welcomed EPA’s announcement that it would not implement RINs for electricity (eRINs) as part of today’s final rule. As the organization noted in oral testimony and written comments to EPA, the agency’s initial proposal for incorporating eRINs into the RFS was overly complex and inconsistent with RIN generation provisions for all other renewable fuels. RFA joined several other stakeholder groups in encouraging EPA to reconsider its eRIN proposal and take more time to get it right.

“We appreciate that EPA was responsive to the many questions and concerns raised by numerous stakeholders regarding eRINs, and we believe the agency did the right thing by calling a timeout on implementation of those provisions,” Cooper said. “We look forward to continuing to engage with EPA on the best methods for bringing renewable electricity into the RFS program.”

RFA provided substantive written comments on EPA’s proposal and offered oral testimony during a public hearing in January.

ACE Statement on EPA’s Final RFS Ruling for 2023–2025 Volumes

Sioux Falls, SD (June 21, 2023) – Today, the U.S. Environmental Protection Agency (EPA) finalized Renewable Volume Obligations (RVOs) for the 2023-2025 Renewable Fuel Standard (RFS) compliance years, including restoring the final 250 million gallons in remanded volume by the DC Circuit Court in 2017. American Coalition for Ethanol (ACE) CEO Brian Jennings issued the following reaction to EPA’s final rule:
“If EPA’s goal with the Renewable Fuel Standard is to maximize reductions in greenhouse gas (GHG) emissions from the transportation sector, today’s final rule falls short by arbitrarily limiting conventional biofuel use to 15 billion gallons in 2024 and 2025 compared to the Agency’s proposal of 15.25 billion gallons for each of those years. Higher blending targets would enable fuels such as E15 and E85 to quickly displace carbon pollution from gasoline, but EPA’s proposal will rein in those opportunities.
“We are supportive of finalizing the 250-million-gallon remedy as a supplemental requirement for 2023 and agree with removing the controversial eRIN proposal from the final rule.
“ACE’s experience with EPA’s oversight of the RFS over time requires us to remain vigilant to ensure mismanagement or unwarranted waivers are not used to undermine the physical blending of ethanol that has required litigation to rectify in previous years. We will also continue to press the Agency to once and for all update its antiquated greenhouse gas (GHG) model assumptions about corn ethanol. We continue to urge EPA to follow the science and adopt the latest GREET model for its lifecycle modeling, consistent with what Congress required of Treasury in the Inflation Reduction Act 45Z clean fuel production tax credit.”

NCGA: EPA Sets Final Renewable Fuel Volumes for 2023-2025

The U.S. Environmental Protection Agency today released final volume requirements under the Renewable Fuel Standard for 2023, 2024 and 2025, providing for annual growth in total renewable fuel volumes, although with lower conventional biofuel volumes than EPA had proposed.

Read More

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