EPA Delivers Final RFS ‘Set’ Rule to White House OMB

May 18, 2023

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by Erin Voegele (Ethanol Producer Magazine) The U.S. EPA has delivered its final rule to set 2023, 2024 and 2025 Renewable Fuel Standard blending obligations to the White House Office of Management and Budget. OMB review marks a final stage before promulgation of a rulemaking.

According to information published to the OMB website, the final rule was submitted on May 15. The OMB’s description of the rulemaking does not indicate whether it will contain provisions related to electric renewable identification numbers (eRINs). eRINs were addressed in the proposed rule, but recent reports have suggested the EPA may exclude or separate eRIN provisions from the pending rulemaking.

The EPA released the proposed rule, referred to as the “set” rule, in December. A public comment period was open through Feb. 10.

The proposed rule sets the 2023, 2024 and 2025 renewable volume obligations (RVOs) at 20.82 billion gallons, 21.87 billion gallons, and 22.68 billion gallons, respectively. A 250-million-gallon supplemental obligation would also be imposed for 2023. That supplemental obligation aims to address remand of the 2014-2016 annal rule by the D.C. Circuit Court of Appeals in Americans for Clean Energy v. EPA. A similar 250-million-gallon supplemental obligation was implemented for compliance year 2022.

The proposed 2023 RVO of 20.82 billion gallons would be up 190 million gallons when compared to the 2022 RVO finalized last year.

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Representatives of the biodiesel and renewable diesel industries have criticized the “set” rulemaking for proposing to set biomass-based diesel targets at far below the level of expected production. U.S. consumption of biodiesel and renewable diesel reached an estimated 3.1 billion gallons last year. Current combined capacity for biodiesel and renewable diesel is nearly 5.5 billion gallons. Data published by the U.S. Energy Information Administration data currently projects renewable diesel capacity alone will double to 5.9 billion gallons by the end of 2025, far above the proposed 2.95 billion gallon RVO for biomass-based fuels proposed by the EPA.

The EPA is required to issue a final rule setting 2023, 2024 and 2025 RFS RVOs by June 14 under a consent decree reached as part of a legal challenge filed by Growth Energy last year related to the EPA’s failure to meet statutory RFS deadlines. With the final rule now under OMB review, the agency seems on track to meet that deadline. READ MORE

EPA sends final biofuel blending mandate rule to White House for review (Economic Times Auto)

Biodiesel, Renewable Diesel in Focus This Week (AgWeb)

Proposed EPA renewable fuel rules spark confusion on both sides of the border (Alberta Report)

The EPA Faces Questions About Its Approval of a Plastic-Based Fuel With an Astronomical Cancer Risk (ProPublica)

NATSO, SIGMA Urge OMB, EPA to Revise E-RIN Program and Increase Blending for Biodiesel, Renewable Diesel (NATSO/PR Newswire)

Excerpt from AgWeb: The Office of Management and Budget (OMB) is reviewing the final blending levels under the Renewable Fuel Standard (RFS) for 2023 and beyond, with early focus on biodiesel and renewable diesel.

So far, three meetings have been scheduled with industry groups — the National Oilseed Processors Association (NOPA) on May 23, NATSO, which represents truck stops, on May 31, and the Clean Fuels Alliance of America (formerly the National Biodiesel Board) on June 1.

The Environmental Protection Agency's (EPA) proposed levels for biomass-based biodiesel and advanced biofuels have faced criticism, with detractors claiming they do not reflect the expansion that renewable diesel has seen and is planning for.

The Clean Fuels Alliance of America, along with other groups, has urged EPA Administrator Michael Regan to increase the proposed biomass-based biodiesel and advanced biofuels levels. They argue that the current proposed volumes do not align with industry investments and plans to expand production and availability of these fuels by 2025.

EPA is required to finalize the RFS levels for 2023 by June 14, as per a consent agreement reached in court with Growth Energy. READ MORE

Excerpt from Alberta Report: But the confusion only deepened on the definition of eligible “waste” products that can be blended into fuel. Conventional wisdom suggests it means agricultural byproducts, but ProPublica reported that more than half of all products cleared so far under the new requirements are not in fact ‘biofuels’ at all — but recycled plastics.

Under the plan, the EPA gave Chevron approval to produce jet fuel from used plastics derived from petroleum. In addition to actually increasing emissions, ProPublica and the UK Guardian found the compounds could result in a one-in-four cancer risk from breathing the emissions from the jet fuel, which is higher than the lifetime risk of lung cancer in smokers.

As for canola producers, the reaction to allowing renewable diesel and jet fuel to be categorized as “advanced biofuels” was mixed.

The Canola Council of Canada last year said it was enthusiastic over the change which it said is an opportunity to diversify the canola export market away from food-grade oil sales to China. Canada presently has 14 processing plants and several more have been announced in southern Saskatchewan over the next few years.

The kicker is, Biden’s subsidies — as much as $2 per gallon for renewable fuels — could encourage US farmers to start seeding canola acres south of the border over other traditional crops, increasing protectionist competition and forcing the government to adopt similar subsidies here.

Already, a $600-million, 6,500 barrel per day renewable diesel plant in Burnaby was cancelled by Calgary-based Parkland Corp. over changes in the US tax system that favour its own producers. The extent of those ‘buy America’ provisions presently rests on negotiations over the debt ceiling.

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In its fourth quarter report, it said the decision to not proceed with the facility was due to “rising project costs, a lack of market certainty around emerging renewable fuels and the US Inflation Reduction Act of 2022, which advantages US producers.”

Even environmental activists are upset. Last June the Center for Biological Diversity filed suit against the new rules, accusing the EPA of failing to consider how the increase in land conversion as well as pesticide and fertilizer use needed to meet the higher biofuel targets will affect endangered species. READ MORE

Excerpt from NATSO/PR Newswire: NATSO, representing truckstops and travel centers, and SIGMA: America's Leading Fuel Marketers, recently urged the White House Office of Management and Budget (OMB) and the Environmental Protection Agency (EPA) to increase the blending mandate for biodiesel and renewable diesel under the Renewable Fuel Standard. The associations, representing more than 80 percent of retail fuel sales in the United States, also encouraged EPA to remove its proposed e-RIN program from its final Renewable Volume Obligations for 2024, and instead revise that program to allow EV charging station owners and operators to leverage e-RINs to make investments in charging stations more attractive.

NATSO and SIGMA have been meeting with the White House and the Office of Management and Budget over the last several weeks on these issues. During those meetings, the associations encouraged EPA to separate its e-RIN proposal out of the 2024 program and instead pursue an e-RIN program that integrates public charging stations in time for the 2025 compliance year.

"By separating e-RINs from its upcoming RVOS, the agency can rework its original proposal and ensure that e-RIN policies encourage private investment in electric vehicle charging stations," said David Fialkov, Executive Vice President of Government Affairs for NATSO and SIGMA. "Investments in DC fast chargers are not projected to be profitable for many years. Taking the time to revise the e-RIN proposal to incorporate charging stations will help overcome the market challenges that are depressing private investment in charging infrastructure, helping the Administration to reach its goal of 500,000 EV chargers."

NATSO and SIGMA also encouraged the agency to increase the total advanced biofuels mandate by at least an additional 250 million gallons for each year to accommodate the additional renewable diesel that is being introduced into commerce.

"Biodiesel and renewable diesel represent the most viable near-medium term option for decarbonizing the trucking sector," Fialkov said. "EPA should encourage additional investments in these fuels. Raising the total advanced mandate by at least 250 million gallons above and beyond what was proposed would be a step in the right direction."

NATSO and SIGMA are eager to continue working with EPA on policies that ensure public charging can benefit from e-RINs. We look forward to continuing to work with EPA to develop an e-RIN program that includes public charging in time for the 2025 compliance year.

About NATSO and SIGMA

NATSO is the national trade association representing America's truckstops, travel centers and off-highway transportation energy providers. Founded in 1960, NATSO represents the industry on legislative and regulatory matters; serves as the official source of information on the diverse travel plaza and truckstop industry; provides education to its members; conducts an annual convention and trade show; and supports efforts to generally improve the business climate in which its members operate. For more information, visit NATSO.com. Contact: Tiffany Wlazlowski Neuman, Vice President, Public Affairs.

SIGMA: America's Leading Fuel Marketers represents a diverse membership of approximately 260 independent chain retailers and marketers of motor fuel. While 67 percent are involved in gasoline retailing, 83 percent are involved in wholesaling, 56 percent transport product, 39 percent have bulk plant operations, and 20 percent operate terminals. Member retail outlets come in many forms including truckstops, traditional "gas stations," convenience stores with gas pumps, cardlocks, and unattended public fueling locations. READ MORE