EPA Releases Proposed 2019 RFS RVOs, Fails to Address Waivers COMMENT DEADLINE: August 17, 2018

June 26, 2018

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by Erin Voegele (Ethanol Producer Magazine) On June 26, the U.S. EPA released a proposed rule that aims to require 19.88 billion gallons of biofuels to be blended into the U.S. fuel supply in 2019, up from 19.29 billion gallons in 2018. The proposed volume allows for up to 15 billion gallons of corn ethanol.

The rulemaking includes proposed 2019 renewable volume obligations (RVOs) under the Renewable Fuel Standard, along with the 2020 RVO for biomass-based diesel.

Information released by the EPA shows the proposed 19.88 billion gallon RVO for 2019 includes 381 million gallons of cellulosic biofuel, 4.88 billion gallons of advanced biofuel and 2.1 billion gallons of biomass-based diesel. The 2019 RVO for biomass-based diesel was set last year. The proposed 2019 RVOs would allow for up to 15 billion gallons of conventional biofuel to meet the annual blending requirement, most of which is corn ethanol.

When compared to blending obligations finalized for this year, the rulemaking proposes to increase the RVO for cellulosic biofuel from the 288 million gallons in 2018 to 381 million gallons in 2019, an increase of 93 million gallons. The agency has proposed to increase the RVO for advanced biofuel from 4.29 billion gallons in 2018 to 4.88 billion gallons in 2019, an increase of 590 million gallons. The overall RVO for total biofuels would increase from 19.29 in 2018 to 19.88 in 2019 an increase of approximately 590 million gallons. Conventional biofuels, including corn ethanol, can be used to meet a statutory maximum of 15 billion gallons of the 2019 RVO.

The rulemaking also proposes to set the 2020 RVO for biomass-based diesel at 2.43 billion gallons, up 330 million gallons when compared to the 2019 and 2018 RVOs of 2.1 billion gallons.

On a percentage basis, the proposed rule would require total renewable fuel to comprise 10.88 percent of U.S. transportation fuel next year, including 2.67 percent advanced biofuel, 1.72 percent biomass-based diesel and 0.209 percent cellulosic biofuel.

A comment period on the EPA’s proposal is set to open following publication of the proposed rule in the Federal Register. Comments can be filed online at www.Regulations.gov under Docket ID No. EPA-HQ-OAR-2018-0167. The comment period is set to close Aug. 17. The EPA also indicated it will scheduled a public hearing on the proposed rule soon. A pre-publication version of the proposed rule can be downloaded from the agency’s website.

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“The EPA must demonstrate that targets will not be undercut by refinery handouts,” (Brooke) Coleman (executive director of the Advanced Biofuels Business Council) continued. “At the same time, Administrator Pruitt must take concrete action on the president’s pledge to open new markets for advanced biofuels by lifting seasonal regulations on E15.

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“Administrator Pruitt continues to disregard President Trump’s campaign promise that ‘the EPA should ensure that biofuel blend levels match the statutory level set by Congress under the RFS.’ The 2019 proposed RVOs reinforce our decision to challenge certain Small Refinery Exemptions in Court and to petition EPA to account for lost volumes of renewable fuel resulting from the unprecedented number of retroactive Small Refinery Exemptions granted by the agency,” (Brian) Jennings (CEO of the American Coalition for Ethanol) said.

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The Biomass Power Association criticized the EPA for failing to process RFS fuel pathways for biomass power. “Despite plainly qualifying as a cellulosic transportation fuel when paired with electric vehicles, EPA has so far failed to process the pathways for biomass power that are before the agency,” said Bob Cleaves, CEO of the BPA.

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“We urge President Trump to direct the EPA to rein in out-of-control small refinery exemptions, to order the reallocation of previous exemptions, to address the 500 million gallons owed to conventional biofuels from the illegal 2016 RFS reduction, and to expedite new advanced biofuel pathway approvals,” Shaw (Monte Shaw, executive director of the Iowa Renewable Fuels Association) continued. “Rural America needs the RFS to work as intended, and it will if the EPA stops undermining the RFS at every turn.”

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“However, the advanced biofuels industry is still suffering the effects of the agency’s decision to arbitrarily limit growth for low carbon biofuels in 2018, by setting a backward looking RFS requirement. The 2019 volumes should be higher, to correct from last year and also spur growth for the coming year." (Brent Erickson, executive vice president of Biotechnology Innovation Organization’s Industrial and Environmental Section) READ MORE

EPA Is Said Ready to Propose Biofuel Quotas After Backlash (Bloomberg Quint)

Trump to Hit Refiners With Biofuels Boost (Bloomberg)

Proposed RFS Growth Sends Hopeful Signal to Biodiesel Industry (National Biodiesel Board)

Pruitt Shows His Anti-Ethanol Stripes, Again (Renewable Fuels Association)

Growth Energy Issues Statement on Continued RFS Waiver Misuse at EPA (Growth Energy)

Growth Energy: Proposed 2019 RVOs Can’t Undo Damage from RFS Waivers (Growth Energy)

ANOTHER YEAR OF RFS VOLUMES IS A REMINDER OF THE NEED FOR REFORM (American Petroleum Institute)

PRUITT PROPOSES NEW STANDARDS FOR ETHANOL REGS COSTING OIL COMPANIES MILLIONS (Daily Caller)

PRUITT’S HONESTY QUESTIONED BY RFA CEO (Brownfield Ag News)

EPA lifts renewable fuels in 2018-2020 proposal: industry welcomes volumes, warns on refinery waiver imapct (Biofuels Digest)

GRASSLEY RUNS OUT THE BIG GUNS FOR EPA: (Politico's Morning Energy)

Grassley suggests EPA's Scott Pruitt breaking the law in granting ethanol waivers (Washington Examiner)

EPA seeks to boost biofuels mandate (The Hill)

New RFS Volumes Tell Only Part of Story (DTN The Progressive Farmer)

Trump Proposes Hitting Oil Refiners With Boosted Biofuel Quotas (Bloomberg)

Ethanol Report on EPA RFS Proposal (Energy.AgWired.com; includes AUDIO)

FACTBOX-Ethanol, oil groups criticize U.S. biofuels plan; biodiesel industry cheers (Reuters)

EPA Releases RFS Proposal; Fails to Reallocate Volume Lost to Waivers (Hoosier Ag Today)

Ethanol Blog -- RINs Slide after EPA Issues 2019 RVO Proposal (DTN The Progressive Farmer)

House Agriculture Committee Ranking Member Collin C. Peterson Statement on EPA Renewable Volume Obligation Levels for 2019 (House Committee on Agriculture-Democrats)

Proposed RFS growth sends hopeful signal to biodiesel industry (National Biodiesel Board/Biodiesel Magazine)

Waivers complicate new EPA biofuels targets (Quad City Times)

Frustration Continues with EPA’s Pruitt Over Biofuels (Hoosier Ag Today)

EPA proposes quotas for renewable fuel, biomass-based diesel (Oil & Gas Journal)

Pacific Ethanol CEO lauds new renewable fuel standard — if it's enforced (Sacramento Business Journal)

Pruitt To Ethanol Producers: Make My Day (Seeking Alpha)

Attis Industries Applauds Proposed EPA Increase in Advanced Biofuel Production (Attis Industries/Market Watch)

RFS Roundup: EPA Announces Renewable Fuel Volumes for 2019 – Increase Obscures Impact of Waivers (Enviroment and Energy Study Institute)

EPA proposes RVOs for 2019, American Biogas Council responds (Bioenergy News)

AMA Opposes Increase Of Additional Federal Ethanol Mandates (Motorcycle.com)

More than 290,000 comments filed on 2019 RFS proposal (Biomass Magazine)

Excerpt from Politico's Morning Energy: Iowa Sen. Chuck Grassley reminded the Trump administration of his clout Tuesday in slamming EPA's decision not to reallocate small refiners' waived obligations under the Renewable Fuel Standard. "As chairman of the Senate Judiciary Committee, I ... have concerns that EPA may be ignoring or abusing the Administrative Procedure Act as they continue to grant waivers in secret and refuse to respond to congressional oversight and public information requests regarding the practice," Grassley said in a statement.

This is the first time Grassley has invoked his Judiciary chairmanship in discussions over the RFS, a Republican Senate aide noted to ME. The committee has jurisdiction over the APA, as well as judicial nominations that are a priority for the president and GOP leaders. READ MORE0

Excerpt from DTN The Progressive Farmer: EPA proposes a bump in the total percentage of renewable fuel in the fuel supply from 10.67% to 10.88%. Had the agency decided to reallocate gallons to other obligated parties, it would have increased the percentage by more. The 0.21% bump reflects the proposed increases in all categories, minus corn ethanol.

A Renewable Fuels Association analysis found the agency has exempted a total of about 1.6 billion gallons from the RFS in 2016 and 2017 through small-refinery waivers. Those estimated gallons are not reallocated by the latest EPA proposal.

The EPA previously asked the public for comment on how to improve transparency in the biofuels credit market. Though the agency has been challenged in court on the methodology it uses to determine waivers, the EPA indicated it was not seeking comment on how to change the process.

"EPA is not soliciting comments on how small-refinery exemptions are accounted for in the percentage standards formulas in 40 CFR 80.1405, and any such comments will be deemed beyond the scope of this rulemaking," the agency said.

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Pruitt also told farmers in Lincoln that his agency works jointly with the U.S. Department of Energy in making decisions on waiver requests. But a report by Reuters on Tuesday suggests the DOE recommended EPA limit the number of waivers granted in 2016 and 2017, and recommended only partial waivers in some cases. The EPA went ahead and granted full waivers. READ MORE