EPA Takes Next Steps in Renewable Fuel Standard Program for 2023-25 -- Proposal Seeks Public Input on Program’s Role in U.S. Energy Security, Economy and Environment DEADLINE February 10, 2023

December 01, 2022

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(U.S. Environmental Protection Agency) Today, EPA issued a multi-part proposal that will build on the strong foundation for the Renewable Fuel Standard (RFS) program started in the Biden-Harris Administration and seeks to advance the priorities of energy security, less pollution, and consumer protection. The RFS “Set” proposal requests public input on required volumes of biofuel for the next one to three years and on a series of important modifications to strengthen and expand the program. The agency is seeking public input on the proposal to help shape the RFS program in the years ahead.

“The Renewable Fuel Standard program is critical to helping incorporate more homegrown biofuels into the market,” said EPA Administrator Michael S. Regan. “This proposal supports low-carbon renewable fuels and seeks public input on ways to strengthen the program. With this proposal, EPA seeks to provide consumers with more options while diversifying our nation’s energy mix. EPA is also focused on strengthening the economics of our critical energy infrastructure, needed to maintain and boost our energy security. We’re eager to continue the dialogue on how biofuels can bolster U.S. energy security, protect consumers from high fuel costs, strengthen the rural economy, and help reduce greenhouse gas emissions.”

This proposal includes steady growth of biofuels for use in the nation’s fuel supply for 2023, 2024, and 2025. Because the Energy Independence and Security Act of 2007 (EISA) does not include volumes after 2022, this is the first time that EPA is setting these proposed biofuel volume targets without using those outlined in statute. When setting biofuel volumes for years after 2022, EPA must consider a variety of factors specified in the statute, including costs, air quality, climate change, implementation of the program to date, energy security, infrastructure issues, commodity prices, and water quality and supply.

The agency is seeking comment on the proposed volumes and how to appropriately balance these factors so that the program works for renewable fuel growers and producers, refiners and the union workers who operate these facilities, and fuel consumers. Because this rule is an opportunity to take a fresh look at many aspects of the program, EPA is also seeking comment on how this rule can intersect with continued viability of domestic oil refining assets, including merchant refineries, how best to support novel fuels like sustainable aviation fuels and clean hydrogen, and how to account for the new and updated incentives in the Inflation Reduction Act.

EPA is also proposing new regulations governing the generation of qualifying renewable electricity made from renewable biomass that is used for transportation fuel in electric vehicles. The agency is seeking comment on this new component of the RFS program that would tie electricity generation from renewable biomass into the program for the first time.

This proposed rule would increase U.S. energy security by reducing U.S. oil imports by roughly 160,000 to 180,000 barrels of oil per year over the time frame of the proposed rule, 2023 to 2025. The anticipated value of the energy security benefits over the time frame of the proposed rule ranges from $200-$223 million per year.

An accompanying analysis shows the proposal would have minimal impacts on the price of refined products.

A summary of the proposed volume requirements for 2023-2025 is provided below:

Proposed Volume Targets (billion RINs)

	2023	2024	2025
Cellulosic biofuel	0.72	1.42	2.13
Biomass-based diesel*	2.82	2.89	2.95
Advanced biofuel	5.82	6.62	7.43
Renewable fuel	20.82	21.87	22.68
Supplemental standard	0.25	n/a	n/a

*Biomass-based diesel is in gallons

EPA will be soliciting public comment on the proposed rule and holding a public hearing in January. Learn more information on RFS volume requirements.

Learn more information on the RINs program. READ MORE To comment

Related articles and Announcement

Horowitz: Time for House Republicans to repeal statist ethanol mandate (Blaze Media)

Environmentalists Hate the EPA’s Proposed Biofuel Standards: But ethanol, biomass, and biogas producers are “pretty pleased” by agency’s new recommendations. (Mother Jones)

Clean Fuels Urges EPA to Either Raise RFS Multiyear Volumes or Only Finalize 2023 Volumes (Clean Fuels Alliance America)

Advanced Biofuels Association strongly objects to EPA’s 2023-’25 volumes in RFS proposal (Advanced Biofuels Association/Biobased Diesel Daily)

Iowa ag secretary calls on EPA to protect RFS in final rule (Ethanol Producer Magazine)

Secretary Naig Calls on EPA to Accelerate Biofuel Growth and Protect Congressional Intent in Final RFS Rule (Iowa Department Of Agriculture and Land Stewardship)

Long Opposed To RFS, Oil Sector Groups Split Over EPA’s ‘Set’ Proposal (Inside EPA)

Excerpt from Clean Fuels Alliance America: A three-year, no-growth RFS rule for advanced and biomass-based diesel would be devastating.

Today, Clean Fuels Alliance America filed formal comments on the Environmental Protection Agency’s proposed Renewable Fuel Standards for 2023–2025 and Other Changes. After sending signals supporting growth for biomass-based diesel and advanced biofuels in June 2022, EPA reverted to the pattern of flatlined volumes common in previous years. Clean Fuels asks the agency to significantly increase the volumes for biomass-based diesel and other advanced biofuels over the next three years, based on the factors that EPA is required to consider, such as the commercial development of these fuels, the positive impact on the economy, the benefits for consumers, and the significant environmental benefits.

“The clean fuels industry today meets a significant portion of the nation’s demand for heavy duty on-road fuels, helping to lower diesel fuel prices that impact the costs of all consumer goods,” said Kurt Kovarik, Vice President of Federal Affairs with Clean Fuels. “The industry is investing to double production, based on signals from the administration in the SAF Grand Challenge and pledge to cut carbon emissions in half. Flatlined volumes for the RFS threaten to undermine our industry’s investments as well as derail the administration’s goals for domestic energy security, jobs, economic opportunities, and environmental gains.”

The Energy Information Administration recently projected that domestic renewable diesel capacity could more than double through 2025 to 5.9 billion gallons. EPA’s data show that more than 3.6 billion gallons of advanced biomass-based diesel was generated for the RFS program in 2022, an increase of more than 500 million gallons over 2021. The growth is supported by investments of nearly $5 billion by oilseed processors to increase availability of vegetable oils and meal for domestic use. But EPA proposed to keep RFS biomass-based diesel requirements below 3 billion gallons through 2025.

“In finalizing the overdue rules for 2021 and 2022, Administrator Regan committed to increase availability of homegrown fuels, put the RFS program back on track, and deliver certainty and stability,” Kovarik added. “December’s proposed volumes for biomass-based diesel and advanced biofuels contradict this sentiment.”

“Clean Fuels asks that EPA increase the D4 BBD volumes by 500 million gallons year over year and increase the D5 advanced volumes by 1 billion RINs year over year as supported through the data,” writes Kovarik. “If EPA is unable to significantly raise the volumes across the three years, we respectively request that the agency only finalize 2023 requirements as directed by the Consent Decree. Finalizing a ‘no growth’ scenario as proposed will have devastating consequences on the investments being made.”

A copy of the comments is available on Cleanfuels.org.

Recently, Clean Fuels published a new study, “Economic Impact of Biodiesel on the U.S. Economy 2022,” conducted by LMC International. The study finds that based on 2021 market data, the biodiesel and renewable diesel industry produced 3.1 billion gallons and generated $23.2 billion in economic activity, while supporting 75,200 jobs paying $3.6 billion in annual wages in the United States. For every 100-million-gallon increase in domestic clean fuel production, the direct, indirect and induced economic activity increases by $1.09 billion and U.S. jobs grow by 3,185. The largest economic and employment benefits occurred in the farming, oilseed processing, and fuel production sectors.

The study further calculates that producing 6 billion gallons of clean fuels in the United States would increase overall economic activity from the current $23.2 billion to $61.6 billion and support 187,003 jobs earning $8.8 billion in wages. The construction of additional capacity would increase economic activity by an added $4.3 billion and support an additional 144,500 related temporary jobs earning $5.8 billion in wages. READ MORE

Excerpt from Advanced Biofuels Association: The Advanced Biofuels Association submitted comments to U.S. EPA Feb. 10 urging the agency to increase the Renewable Fuel Standard program’s proposed renewable volume obligations (RVOs) for 2023-’25 to accurately reflect the volumes of advanced, biomass-based diesel and cellulosic pools available in the market.

“The EPA’s multiyear RFS proposal ignores the proven production capacity of advanced low-carbon liquid transportation fuels, essentially undermining Congress’ intent for the program by flatlining renewable fuel obligations and stretching the law to categorize electricity as a ‘fuel’,” said Michael McAdams, president of the Advanced Biofuels Association. “The Advanced Biofuels Association urges the agency to increase volumes of liquid renewable fuels to ensure a cleaner, more independent energy future for America, as the Biden administration has promised.”

The Advanced Biofuels Association encourages the EPA to revisit its volumetric-obligation calculations, citing research conducted by Lipow Oil Associates on the projected production capacity of renewable diesel in 2023, 2024 and 2025, and an analysis of global feedstock supply conducted by LMC.

The research finds that there are sufficient feedstocks available, accounting for food, to support an increase in renewable volumes and more than enough production capacity already on the ground and running to support increased RVOs.

The studies suggest that a reasonable approach is to raise the biomass-based diesel pool by 500 million gallons per year, totaling close to 8 billion RINs in the advanced pool by 2025.

“Based on current and projected volumes of the D5 pool, it is indefensible to claim that feedstocks and production capacity are insufficient to support growth in the advanced category, including those to produce SAF and renewable diesel and biodiesel,” McAdams said.

The Advanced Biofuels Association’s comments also addressed several key areas of significant opportunity the agency must consider as it moves to finalize the “set” rule.

Notably, the association recommends EPA reevaluate unnecessary restrictions on current and future renewable feedstocks to better support the production of low-carbon fuels.

“As the climate emergency grows, we will undoubtedly need an all-of-the-above approach to carbon reduction from the transportation sector,” McAdams said. “The Biden administration has a prime opportunity with EPA’s set-rulemaking process to disrupt the status quo and chart a more progressive RFS program that expands and expedites the transition to a lower-carbon future powered by American-made, renewable liquid transportation fuels. The Advanced Biofuels Association will continue to serve as a resource to the EPA throughout the rulemaking process and in our collective effort to reduce America’s transportation-based greenhouse-gas emissions.”

The Advanced Biofuels Association’s full comments can be accessed here. READ MORE