EPA Proposes Higher Renewable Fuel Standards

by | Feb 1, 2013

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The EPA is proposing a 62 percent increase in the amount of cellulosic biofuels that refiners must blend into their gasoline and diesel, despite a federal court’s decision last week to strike down its 2012 standard for the fuel.

The agency yesterday proposed the 2013 Renewable Fuel Standards for four fuel categories:

  • Biomass-based diesel (1.28 billion gallons; 1.12 percent)
  • Advanced biofuels (2.75 billion gallons; 1.60 percent)
  • Cellulosic biofuels (14 million gallons; 0.008 percent)
  • Total renewable fuels (16.55 billion gallons; 9.63 percent)

In all, the agency proposed refiners blend more than 20.5 billion gallons of renewable fuels into gasoline and diesel this year, 1.35 billion gallons over the 2012 mandated amount.

The Energy Independence and Security Act of 2007 established the Renewable Fuel Standards program and the annual renewable fuel volume targets, which steadily increase to an overall level of 36 billion gallons in 2022. To achieve these volumes, EPA calculates a percentage-based standard for the following year. Based on the standard, each refiner and importer determines the minimum volume of renewable fuel that it must ensure is used in its transportation fuel.

The proposal comes a week after a US federal court struck down the 2012 Renewable Fuel Standard target for refiner use of cellulosic biofuels, which stood at 8.65 million gallons, but upheld the government’s goal for use of other advanced fuels. The American Petroleum Institute had filed a lawsuit against the EPA over the cellulosic biofuel target. There was no commercial production of the fuel last year, BusinessWeek notes.

In its proposal yesterday, the EPA also unveiled reforms aimed at preventing fraudulent use of Renewable Identification Numbers, credits set up by the EPA to track the production and import of biofuel. Under the new system, a voluntary quality assurance program would verify RINs, although there would be alternative compliance options using existing industry practices and market forces, the EPA said.

In December 2012, Canadian rail company CN shipped the same load of biodiesel back and forth over the US-Canada border 12 times, at a cost of $2.6 million, to exploit a loophole in the renewable fuel standard.

A month earlier, a report by PricewaterhouseCoopers for the National Council of Chain Restaurants found the use of corn-based ethanol required by the 2012 Renewable Fuel Standard mandate had dramatically distorted the market and increased costs throughout the food supply chain to the tune of billions of dollars. 

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