EPA Announces Proposed Volume Standards for 2018, and the Biomass-Based Diesel Volume for 2019

(Environmental Protection Agency) On July 5, 2017 EPA issued proposed volume requirements under the Renewable Fuel Standard program for cellulosic biofuel, advanced biofuel, and total renewable fuel for calendar year 2018. EPA also proposed biomass-based diesel volume standards for calendar year 2019. The proposed volume requirements are listed in the table below.

Proposed Volume Requirements^a
	2018	2019
Cellulosic biofuel (million gallons)	238	n/a
Biomass-based diesel (billion gallons)	2.1^b	2.1
Advanced biofuel (billion gallons)	4.24	n/a
Renewable fuel (billion gallons)	19.24	n/a
^a All values are ethanol-equivalent on an energy content basis, except for BBD which is biodiesel-equivalent. ^b The 2018 BBD volume requirement was established in the 2017 final rule (81 FR 89746, December 12, 2016).

Proposed rule (PDF)(89 pp, 849 K, pre-publication, signed July 5, 2017, About PDF) READ MORE and MORE / MORE (Biofuels Digest) and MORE (Bloomberg) and MORE (Houston Chronicle) and MORE (Reuters) and MORE (Hoosier Ag Today) and MORE (Brownfield Ag News) and MORE (Energy.AgWired.com; includes AUDIO) and MORE (The Hill) and MORE (DTN The Progressive Farmer) and MORE (The Washington Times) and MORE (KWQC) and MORE (ProAg) and MORE (CSP Daily News) and MORE (Platts) and MORE (Environmental and Energy Study Institute) and MORE (Bloomberg)

Excerpt from Biofuels Digest: Let’s look at the individual sectors and see how industry reaction informs us on 8 key themes. Here are 11 industry leaders, in their own words.

We’ve excerpted, organized and bolded comments from the industry in order to make the themes as clear as possible for the reader. Otherwise, this is the actual industry reaction in its own voice.

Staying the course ...

Cellulosic: Missed Opportunity ...

The EPA’s Waiver Authority ...

Missed Opportunity for biodiesel ...

Weakening the signal: More certainty needed ...

Timeliness ...

No Blend wall ...

Imports and exports

Excerpt from Bloomberg: The Trump administration proposed a requirement that U.S. refiners use 15 billion gallons of conventional renewable fuels in 2018, while lowering targets for advanced alternatives that oil refiners have described as unattainable.

The EPA’s new plan will require 4.24 billion gallons of advanced biofuel in 2018, down from 4.28 billion this year and far lower than the 5.25 billion sought by the industry’s leading trade group.

That quota includes 238 million gallons of cellulosic biofuel, a drop from 311 million currently.

Shares of independent refiners without upstream oil production and substantial downstream fuel-blending infrastructure declined Wednesday on the news. Billionaire Carl Icahn’s CVR Energy Inc. fell 3.3 percent. The price of soybean oil, an alternative to ethanol, slumped in Chicago trading, while prices for biofuel credits known as renewable identification numbers jumped. READ MORE

Excerpt from Environmental and Energy Study Institute: EPA chose to reduce both the advanced biofuel and total renewable fuel volumes (80 million gallons total) by approximately the same amount they reduce cellulosic ethanol (73 million gallons). This is notable because EPA says it is attempting to control the amount of imports of ethanol and biodiesel, which primarily qualify for the advanced biofuels category. In past years, EPA allowed some of the advanced biofuels to “backfill for some of the shortfall in cellulosic biofuels,” according to the agency.

Additionally, in reducing statutory volumes by 20 percent in two consecutive years, EPA will consider a “reset” of volumes. According to the Clean Air Act, any RFS reset undertaken by the EPA would require a complete analysis of various factors including impacts of the statute on the environment, the transportation fuels market, prices of agriculture commodities, food prices, job creation and rural development.

Senator Chuck Grassley (R-IA), commented that while he was “glad the EPA proposal holds steady the requirement of 15 billion gallons for conventional ethanol, the lack of any increase for biodiesel is a missed opportunity.”

At a recent EESI briefing, the American Biogas Council and the Coalition for Renewable Natural Gas discussed the huge quantities of wet wastes that among other things, can be utilized as cellulosic fuels under the RFS. Jeff Broin, CEO of POET, a producer of both conventional and cellulosic ethanol, stated that the proposal “will cool advances” in the cellulosic space. One of the purposes of the RFS was to spur innovation in technology and cellulosic feedstock usage. READ MORE