The U.S. EPA has released final 2018 renewable volume obligations (RVOs) under the Renewable Fuel Standard, setting the RVO for total renewable fuel at 19.29 billion gallons, including 288 million gallons of cellulosic biofuel, 2.1 billion gallons of biomass-based diesel, and 4.29 billion gallons of advanced biofuel. In addition, the agency has set the 2019 RVO for biomass-based diesel at 2.1 billion gallons.
In its proposed rule released in July, the EPA proposed to set the 2018 RVO for cellulosic biofuel at 238 million gallons. In the final rule, the agency has increased the RVO slightly to 288 million gallons. The EPA also slightly increased the RVO for advanced biofuel, from 4.24 billion gallons to 4.29 billion gallons. The overall RVO has been increased from a proposed 19.24 billion gallons to a final 19.29 billion gallons. The 2019 RVO for biomass-based diesel, however, has been maintained at the originally proposed volume of 2.1 billion gallons.
When compared to the final RVOs for 2017, the cellulosic RVO has been reduced from 311 million gallons to 288 million gallons. The advanced biofuel RVO, however, has been increased slightly, from 4.28 billion gallons in 2017 to 4.29 billion gallons in 2018. The total RVO has increased by approximately 10 million gallons, from 19.28 billion gallons in 2017 to 19.29 billion gallons in 2018.
“Maintaining the renewable fuel standard at current levels ensures stability in the marketplace and follows through with my commitment to meet the statutory deadlines and lead the agency by upholding the rule of law,” said EPA Administrator Scott Pruitt.
The Renewable Fuels Association pointed out that the final RVOs allow for 15 billion gallons of conventional biofuels, such as corn ethanol, which is consistent with the levels envisioned by congress in the 2007 Energy Independence and Security Act. “We are pleased that the final rule maintains the statutory 15-billion-gallon requirement for conventional renewable fuels like corn ethanol. Under the RFS, ethanol has helped to lower prices at the pump, reduce greenhouse emissions, displace harmful toxic gasoline compounds, reduce crude oil imports, and boost local economies,” said Bob Dinneen, president and CEO of the RFA. “Maintaining the 15-billion-gallon conventional biofuel requirement will accelerate investments in the infrastructure necessary to distribute mid-level ethanol blends like E15 and E30, and flex fuels like E85.
While the final rule is an improvement over the proposed rule, Dinneen said the RFA would encourage the EPA to closely monitor the commercialization of new cellulosic technologies because it believes greater cellulosic production is likely. “The RFS needs to remain a forward-looking program, driving investment in these new technologies,” he said. Dinneen also expressed disappointment that the final rule is not more aggressive with regard to advanced biofuels, such as biodiesel.
Growth Energy applauded the administration for standing up against efforts to destabilize the RFS. “The EPA’s on-time announcement upholds the statutory targets for conventional biofuels, which will provide much-needed certainty for hard-pressed rural communities,” said Emily Skor, CEO of Growth Energy. “We would like to have seen a boost to the target blending levels for cellulosic biofuels, and we will continue to work with the administration to advance the RFS goal of further stimulating growth and showing U.S. leadership in 21st century fuels.”
“The RFS remains America’s single most successful energy policy and continually works to save consumers money, protect the environment, drive rural growth, and secure U.S. energy independence,” Skor continued. “To keep this momentum strong, the EPA must take bold steps toward growth, as outlined by President Trump. We urge the agency to act quickly on the administrator’s promise of a long-overdue fix to Reid vapor pressure rules that needlessly limit sales of E15 during summer months.”
The American Coalition for Ethanol said called the rule a step in the right direction. “ACE members are very pleased that the statutory 15-billion-gallon volume for conventional biofuel will be maintained in 2018 and that EPA is increasing the advanced biofuel volume to 4.29 billion gallons,” said Brian Jennings, CEO of ACE. “This represents a modest step in the right direction for the RFS in 2018. Beyond sending a generally positive signal to the rural economy, increased blending targets also reassure retailers that it makes sense to offer E15 and flex fuels to their customers.”
“While the 288 million gallons of cellulosic biofuel EPA is calling for in 2018 is a small increase from the volume proposed earlier this year, it is disappointing the 2018 volume represents a decrease from the 2017 cellulosic biofuel level of 311 million gallons,” Jennings continued. “We firmly believe the technology exists to increase cellulosic biofuel targets.
“Finally, more can and should be done to overcome regulatory hurdles which prevent market access to higher ethanol blends and ACE remains committed to working with EPA to address those hurdles,” Jennings said.
The Urban Air Initiative called the final RVOs good news, but said “the true challenge for the ethanol industry is to move beyond the limits of the RFS and create genuine, sustainable demand.”
“The record corn crop has set the stage for increased ethanol production—if we can get the fuel into the market,” the UAI continued in its statement. “The regulatory barriers Urban Air has been working to remove are the key to that market. Lifting vapor pressure restrictions and caps on the volume of ethanol that can be used in vehicles is the first step in this process. Urban Air has challenged the Environmental Protection Agency to revise its policies on these and many other regulations.”
“And we cannot lose sight of the fact that this remains a public health issue—ethanol is a clean octane alternative to the toxic aromatics in gasoline that are responsible for a range of pollutants and the resulting health risks,” the UAI continued. “We are redoubling our efforts to have ethanol play a larger role in cleaning up our gasoline. Much like the announcement this week that tobacco companies are under court order to tell the public about the inherent risks of smoking, we think the time has come to take similar steps as it relates to toxic compounds in gasoline.”
Sen. Chuck Grassley, R-Iowa, said the RVOs fall short of industry potential. “The EPA’s announced renewable volume obligations fall short of the full potential of the U.S. biofuels industry,” he said. “That is disappointing, particularly the lack of increase for biodiesel levels and the cut in cellulosic level requirements. Increases in the volume requirements are justified and would be good public policy. Congress intended for the RFS to drive growth in biofuels across all categories. Contrary to that goal, this final rule does little to encourage investment and growth in advanced biofuels. While I hoped for higher levels, they aren’t unexpected and are unfortunately in line with EPA’s original proposal. I’m glad that EPA backed off a later proposal, which would have represented an abandonment of President Trump’s stated commitment to biofuels and the integrity of the RFS. Iowa, rural America and the entire country are made stronger by the many jobs, increased energy independence and cleaner air that biofuels provide. The grassroots energy of this growing industry will continue to be a good news story for the nation. I plan to continue working to impress upon the Administration the capability to grow domestic energy production by unlocking the full potential of biofuels.”