Renewable Fuels Standard Proposal for 2014

by | Jan 6, 2014

In November, EPA released the 2014 Renewable Fuels Standard (RFS) Proposal, and we’re asking for your input on how to encourage  the production and use of renewable energy while balancing practical constraints on the pace at which the market is currently accommodating ethanol above a threshold known as the ethanol “blend wall.”

If you don’t think about energy policy every day, you might be asking yourself, “what’s a ‘blend wall’?”

The answer to that question goes back to 2007, when Congress passed the Energy Independence and Security Act. That legislation created the RFS program, which lays the foundation for reducing greenhouse gas emissions and reducing America’s dependence on oil by growing our nation’s renewable fuels sector.

The RFS program set a target for the renewable fuels to be blended into transportation fuel that rises each year until 2022. Ethanol generally goes into the nation’s supply of E10, gasoline with up to 10 percent ethanol that is sold across the Unites States. In the years between when Congress created that program and today, production of renewable fuels has grown rapidly, but at the same time, fuel economy improvements and other factors have pushed gasoline consumption far lower than what was expected.

Because of those factors, we’re now facing the “E10 blend wall,” the point at which the gasoline fuel pool is saturated with ethanol at the 10 percent level. If gasoline demand continues to decline, as currently forecast, continuing to grow the use of ethanol will require greater use of higher ethanol blends such as E15 and E85. At the present time, there are a number of factors that limit the use of these fuels. As a result, using flexibilities built into the law, EPA is proposing to adjust some of the volume requirements set by Congress for 2014 to align the program with these current market conditions.

But November’s proposal also looks to move beyond current constraints on greater use of biofuels. We’re looking for the best ideas, information, and advice on meeting these challenges and continuing the growth of renewable fuels into the future. We’re focused on listening to all stakeholders, because we understand the importance of a diverse energy supply that includes fuel produced from renewable sources. Consumers, farmers and ranchers, and businesses across the nation have a stake in the availability of renewable energy – and we want to hear from everyone. We see it as an opportunity to ensure that biofuels continue to play an important and growing role in the Obama Administration’s “All of the Above” approach to America’s energy security.

The proposal discusses a broad range of approaches for setting the 2014 standards. The agency notes that growth in capacity for ethanol consumption would continuously be reflected in the standards set beyond 2014. In addition, the proposal recognizes that a range of other tools, programs, and actions have the potential to play an important complementary role. The agency is seeking comment on what actions could be taken by various industry and other private stakeholders, as well by the government, to help overcome the challenges faced by the program and to minimize the need for adjustments in the statutory renewable fuel volume requirements in the future.

We expect to receive additional data during a 60-day public comment period, and we can adjust the proposed volumes as appropriate based on the latest information. EPA looks forward to continued engagement with stakeholders as we work in consultation with the Departments of Agriculture and Energy toward the development of a final rule.

The proposal has been posted on our website.  I encourage you to review it and give us your feedback during the public comment period, which opened in late November with official publication in the Federal Register.

Janet McCabe is the Acting Assistant Administrator for the Office of Air and Radiation, having previously served as OAR’s Principal Deputy to the Assistant Administrator. Prior to joining EPA in November 2009, McCabe was Executive Director of Improving Kids’ Environment, Inc., a children’s environmental health advocacy organization based in Indianapolis, Indiana and was an adjunct faculty member at the Indiana University School of Medicine, Department of Public Health.  Ms. McCabe grew up in Washington, D.C. and graduated from Harvard College in 1980 and Harvard Law School in 1983.

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