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EPA’s RVO Numbers Could Have Been “More Aggressive”

The Environmental Protection Agency released its Renewable Volume Obligations with lower numbers than expected for 2024 and 2025. Brooke Miller, executive director of the Advanced Biofuels Business Council, says it’s a step back from the EPA’s initial proposal.

Miller said; “Locking down a multiyear rule is a positive. We’ve never had multiyear certainty in this program, so the markets are eventually going to benefit from that. And then the second positive is we’re locking down the end of the era of small refinery exemption abuse that has been a problem for this industry since 2016. So that’s sort of the upside. The flip side is some of the aggressive biofuel components of the proposal were lost in the final. It’s not totally uncommon that we have some sort of mediation that goes on at the highest levels of government on this. We did back off on some of the conventional biofuel volumes, and there is an ongoing concern that the build-out of the renewable diesel markets and biodiesel markets will exceed the volumes contained in the RVO, which, of course, would create supply problems going down the line. So, we think some of the advanced biofuel numbers could have been more aggressive.”

He also talks about why the final numbers weren’t as high as the initial EPA proposal; “The optical reason is the White House and EPA tabled their plan to incorporate eRINs or RINs for biomass to electric vehicles. And so, there were a lot of ruins a lot of gallons in the proposal that just sort of came out by virtue of the fact that they tabled that proposal. So, there’s an optical component to this that’s not being discussed, and that is why did the numbers come down? That’s the number one reason. The substantive reason is, in particular, the White House is grappling with the degree to which it wants to lean into biodiesel and renewable diesel volumes in the context of the incentives that it has for these fuels in the Inflation Reduction Act for sustainable aviation fuel, the clean fuel production credit, and so it’s a layered consideration now, and I think they sort of were overly cautious on that particular element of it.”

Looking to the future of biofuels, Miller says the White House has some important decisions ahead.

Miller; “The Biden administration has a lot of important decisions to make in the next couple of months. It has to make decisions about the degree to which biodiesel, renewable diesel, and ethanol are eligible for some of the tax credits that were passed as part of the Inflation Reduction Act. The degree to which they are going to lean into alcohol to jet, renewable diesel to jet, for the sustainable aviation fuel targets that it’s established, which are very, very aggressive. And so, inside the lines on some of these regulatory decisions, that will determine the degree to which the biodiesel, renewable diesel industries, and the ethanol industry meet these targets for growth and get to the next level in terms of their importance for U.S. energy security.”

Story courtesy of the NAFB News Service

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