Advanced BioFuels USA

(Environmental Protection Agency) On June 3, 2022, EPA finalized a package of actions setting biofuel volumes for the Renewable Fuel Standard (RFS) program for years 2020, 2021, and 2022, and introducing regulatory changes intended to enhance the program’s objectives.

*All values are ethanol-equivalent on an energy consult basis, except for biomass-based diesel (BBD), which is biodiesel-equivalent.

**The 2020 and 2021 BBD volumes were established in previous RFS annual rulemakings.

EPA also established a 250-million-gallon “supplemental obligation” to the volumes finalized for 2022 and stated its intent to add another 250 million gallons in 2023, to address the remand of the 2014-2016 annual rule by the DC Circuit Court of Appeals in Americans for Clean Energy v. EPA.

To promote efficiency and opportunity in producing biofuels, this action also establishes a regulatory framework that allows biointermediates to be included in the RFS program, while ensuring environmental and programmatic safeguards are in place.

Additional Resources

• Final 2020-2022 Volume Standards (pdf) (pre-publication, signed June 2022)
• Regulatory Impact Analysis (RIA) (pdf) (June 2022, EPA-420-R-22-008)
• Response to Comments Document (pdf) (June 2022, EPA-420-R-22-009)
• Proposed Volume Standards for 2020, 2021, and 2022

READ MORE

RFA: Today’s Actions on RFS Restore Order, Provide Solid Foundation for Growth (Renewable Fuels Association)

EPA’s Forward-Looking Renewable Fuel Volumes for 2022 Ensure American Families Have Greater Access to Lower-Cost, Lower-Carbon Fuel at the Pump (Growth Energy)

EPA raises amount of ethanol that must be blended with gas (Associated Press)

EPA Trims Ethanol Fuel Mandate for 2020-21 But Raises It for 2022: Biden administration says changes are aimed at helping boost domestic fuel supplies  (Wall Street Journal)

EPA aims to get ‘back on track’ with finalized biofuel blending volumes (Politico Pro)

EPA sets growth in biofuel targets, maintains retroactive cut in latest rollout (Agri-Pulse)

EPA Finalizes RFS Rules (Energy.AgWired.com)

EPA delivers mixed results on biofuels blending requirements (The Hill)

EPA boosts biofuel volumes for 2022, lifting ethanol industry (E&E News)

EPA Takes Action to Reset and Strengthen the RFS Program (Environmental Protection Agency)

RFA APPLAUDS EPA MOVE TO INCREASE RVO, RESTORE RFS INTEGRITY (Brownfield Ag News)

Renewable Fuels Association: EPA actions on RFS restore order, provide solid foundation for growth (DRG News)

EPA Hikes RFS Volumes, Driving Biofuel Groups’ Praise, Refiners’ Criticism (Inside EPA)

RFA CEO Comments on EPA Final RFS Rules (Ag Newswire; includes AUDIO)

EPA tells refiners to raise biofuel blending by 9.5% (Bloomberg/Northweast Arkansas Democat Gazette)

EPA’s RFS Volumes Include Ethanol Cuts — Ethanol RFS Volumes Below 15B Gallons in 2020-2021, but Groups Praise 2022 Volumes (Progressive Farmer)

Biden’s EPA finalizes ethanol, biodiesel blending requirements, requiring largest amount on record (Des Moines Register)

EPA releases renewable fuel volumes: Is the RFS “back on track” or was this “a missed opportunity”? (Biofuels Digest)

EPA announces RFS volumetric requirements, pleases industry (Fence Post)

HIGHEST-EVER ETHANOL MANDATE WILL BOOST HOMEGROWN BIOFUELS, EPA SAYS (Successful Farming)

Restoring order to RFS: biofuel groups are applauding EPA for finalizing renewable volume obligations (RFD TV; includes VIDEO)

EPA Clears Use Of RFS ‘Biointermediates’ But Resists Call To Ease Limits (Inside EPA)

Soybean Growers Praise EPA’s 2022 Biofuel Blending Requirements — and Waiver Denials (Grain.net)

New Biodiesel Levels Will Further Increase Food Prices: NRF (RTT News)

AD Biogas To RNG Update (BioCycle Magazine)

Excerpt from Renewable Fuels Association: The final regulatory actions taken today by the Environmental Protection Agency (EPA) bring order and certainty back to the Renewable Fuel Standard and provide a solid foundation for future growth in the production and use of low-carbon renewable fuels, according to the Renewable Fuels Association. The actions will also lead to lower gas prices for consumers and greater energy security, RFA said.

EPA today finalized a strong renewable volume obligation (RVO) for 2022, requiring the statutory volume of 15 billion gallons of conventional renewable fuel and 5.63 billion gallons of advanced biofuels. In accordance with a court order, the agency also finalized a supplemental requirement of 250 million gallons in 2022 to offset illegally waived volume from the 2016 RFS. In addition, EPA set the 2021 RVO for conventional renewable fuel at 13.79 billion gallons, based on the latest estimates of actual consumption. Finally, EPA finalized the denial of 69 pending small refinery exemption petitions, ensuring that all refiners are held accountable and equally obligated to blend lower-carbon, lower-cost biofuels.

“At long last, the RFS is being put back on track. Today’s actions by EPA and the Biden administration restore integrity and stability to the RFS program after several years of wanton mismanagement and abuse by the previous administration,” said RFA President and CEO Geoff Cooper. “The combination of a strong RVO for 2022, restoration of illegally waived volume from 2016, and a new direction for the SRE program puts the RFS program on solid footing for the future. We thank Administrator Regan and President Biden for honoring their commitments to implement the RFS in a way that is fair, transparent, and focused on growth.”

Cooper also noted that today’s package couldn’t have come at a more important time, as consumers are facing record-high gas prices driven by instability in global energy markets. “By requiring petroleum refiners to blend larger volumes of low-cost biofuels like ethanol, today’s actions will put downward pressure on gas prices and provide economic relief to American families facing record-high pump prices,” he said. “In the last few days alone, wholesale ethanol prices have been as much as $1.30 per gallon lower than gasoline, leading to significant savings at the pump for consumers of ethanol-blended fuels like E10, E15, and E85.”

The association today released an explainer documenting how ethanol reduces prices at the pump, due to its lower cost and the fact that it augments the overall fuel supply.

RFA also underscored the important role a robust RFS plays in enhancing energy security. “Ukraine is 5,000 miles away, but American consumers are feeling the economic impacts of war in Eastern Europe every time they pull up to the pump,” Cooper said. “This is a poignant reminder that the very purpose of the RFS is to increase domestic fuel production, diversify our fuel supply with lower-carbon alternatives, and reduce demand for petroleum imports. Just imagine how much higher gas prices would be without the addition of 15 billion gallons of low-cost ethanol to our fuel supply.”

The only blemish on EPA’s package of regulatory actions is the agency’s decision to reopen and retroactively lower RFS requirements for 2020, Cooper said. “While today’s package of actions collectively marks a major step forward for the RFS program, it isn’t perfect, and we remain disappointed by the approach EPA took on 2020. But we are committed to working with EPA and other stakeholders to continue moving the RFS program forward and growing the market for low-carbon renewable fuels like ethanol.”  READ MORE

Excerpt from Growth Energy:  Today, Growth Energy CEO Emily Skor released a statement in support of the U.S. Environmental Protection Agency’s (EPA) rulemaking under the Renewable Fuel Standard (RFS), which sets the 2022 Renewable Volume Obligation (RVO) for conventional biofuels at 15 billion gallons, a move that sets a baseline for strong future biofuel blending levels under the RFS, ensuring drivers have greater access to lower-cost, lower-carbon fuel at the pump.

“These last six months have been a rude awakening for those who have grown complacent about U.S. energy supplies. EPA’s 2022 renewable fuel blending requirements will deliver savings at the pump for working families, slash carbon emissions, and strengthen U.S. energy security by bringing more American renewable fuel into our fuel supply.

“In just the last few months, E15 has been a shield against skyrocketing fuel prices, saving drivers almost $0.60 per gallon in some areas while American biofuels cut greenhouse gas emissions by 46 percent compared to gasoline.

“We applaud President Biden and his EPA for this action, which will set the direction of total and advanced renewable fuel volumes for 2023 and beyond. By setting conventional implied 2022 RVO volumes at 15 billion gallons, coupled with restoring the first 250 million gallons that had been illegally waived in the 2016 RVO, EPA underscores the critical role biofuels play – and will continue to play – in mitigating climate change and lowering prices at the pump. Moreover, it sends a positive signal as the agency works through its new rule – “the Set” – that picks up where Congress left off and establishes multi-year renewable fuel blending requirements for 2023 and beyond.

“In addition to the 2022 volumes, today’s action from EPA halts all improper small refinery exemptions, a move that will return much needed certainty to the biofuels industry and the entire fuel supply chain.

“EPA does fail to address bipartisan concerns about volume requirements for the 2020 and 2021 RVOs. Nevertheless, we take the 2022 volumes as a strong signal of EPA’s commitment to getting the RFS back on track and we will remain vigilant in ensuring that volumes are met in a timely manner.”

Audio of Emily Skor’s statement is available here.  READ MORE

Excerpt from Environmental Protection Agency:  EPA announced several actions that will help provide a path for the sustained growth of renewable fuels and reinforce the foundation of the Renewable Fuel Standard (RFS) program. Together, these actions reflect the Biden Administration’s commitment to reset and strengthen the RFS, bolster our nation’s energy security, and support homegrown biofuel alternatives to oil for transportation fuel.

“At EPA, we are laser-focused on providing more options for consumers at the pump, and today we are taking steps to increase the availability of homegrown biofuels,” said EPA Administrator Michael S. Regan. “Today’s actions will help to reduce our reliance on oil and put the RFS program back on track after years of challenges and mismanagement. We remain committed to working with all RFS stakeholders to build on today’s actions and deliver certainty and stability in the RFS program.”

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EPA’s actions will help reduce our dependence on oil and diversify our fuel supply by increasing production of domestically produced biofuels.  READ MORE

Excerpt from Biofuels Digest: Two big changes in this ruling

Supplemental Obligation. EPA also established a 250-million-gallon “supplemental obligation” to the volumes finalized for 2022 and stated its intent to add another 250 million gallons in 2023, to address the remand of the 2014-2016 annual rule by the DC Circuit Court of Appeals in Americans for Clean Energy v. EPA.

Intermediates now allowed. Action also establishes a regulatory framework that allows biointermediates to be included in the RFS program, while ensuring environmental and programmatic safeguards are in place.

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Senator Deb Fischer of Nebraska
“It’s always one step forward, three steps back with the Biden Administration and biofuels.While the 2022 RVOs are significant, retroactively lowering the 2020 RVOs directly undermines these gains and contradicts Biden’s campaign promises. Making matters worse, the administration has decided to postpone small refineries’ compliance with the RFS, which hurts the integrity of the whole system.

“Cushioning these bad announcements with the release of long-overdue COVID assistance for producers that was available over a year and a half ago doesn’t change the facts. The President’s actions demonstrate he isn’t committed to supporting rural America or pursuing an all-the-above energy strategy.”

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The Advanced Biofuels Association
“With this RVO ruling, the Biden administration has missed an important opportunity to prioritize advanced low carbon fuels that will help America achieve its climate ambitions and support American energy independence. We were, however, pleased to see the regulations permitting the use of biointermediates finalized in this rule, enabling our members using these processes to participate in the RFS program and increasing the volumetric potential of the advanced biofuels industry now and in the years to come.”

“Fortunately, the administration will have a chance to strengthen the development of America’s low carbon fuel industry and broaden our national supply of renewable fuel sources by setting a more progressive path under the forthcoming “Set” process. The ABFA strongly encourages the EPA to provide certainty to the advanced biofuels industry by finalizing the volume standards for 2023 before the end of 2022.

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The Bottom Line: Action for 2023 soon

Sen. Deb Fischer of Nebraska spoke for all when she noted, “Looking to the future, it is imperative that the administration set robust 2023 RVOs in a timely manner. Doing so will ensure the country is leveraging the power of biofuels to lower costs at the pump and provide consumers with needed financial relief.”

RFS rulings never please everybody — if renewable fuels are happy, generally fossil fuel folks are grumbling, and vice-versa. This package from EPA had the distinction of also dividing the renewable fuels trade associations. Generally speaking, the ethanol sector was positive about 2022 with reservations over retroactive volumes. The heavy-duty sector no doubt is looking at the 10+ billion gallons in capacity that the sector intends to build soon and wonders if any when the volumes will be placed within the program.

Not all global RD/SAF capacity is going into the US, but the lion’s share of it is — in part driven by opportunities presented by Low Carbon Fuel Standards on the US West Coast. It’s worth keeping in mind that RD and SAF count as 1.7 gallons for RFS purposes, because they have higher energy density. To illustrate, 10 billion gallons of global RD/SAF capacity represents 17 billion gallons of RFS capacity. Given conventional ethanol’s 15 billion gallons, 2 billion gallons for US biodiesel and at least 2 billion gallons for the long-term opportunities for RNG, the RVOs are much lower than industry’s potential to build capacity. The annual RVO announce is becoming a brake on the decarbonization of US transportation instead of the accelerator it was intended by Congress to be.  READ MORE

Excerpt from BioCycle Magazine: “We understand why the final volumes are lower than anticipated, mostly because of actual year-to-date production, but we are concerned that the lower volumes undersell the true growth of the biogas industry,” says Patrick Serfass, executive director of the American Biogas Council (ABC). “There are several reasons to believe that the actual production coming soon will be significantly higher: new RNG projects have increased by 47% in the last year; on-farm projects have increased by 21%; and major companies have announced investments in new RNG projects totaling over $2 billion — twice the industry’s total investment in 2020. EPA’s final volumes only recognize a 13% growth from 2021-2022. We are hopeful that future volumes will anticipate the higher growth we see from American biogas fuel providers and developers.”

Serfass references an industry assessment released by Energy Vision in March 2022, which identified 230 operational projects in 2021 that were producing enough fuel to displace nearly 574 million gallons of diesel fuel. The assessment also identified 108 projects under construction last year, a portion of which have either started RNG production or will be producing RNG in 2022.

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The final rule also codified revisions to the definition of an agricultural digester to clarify that only animal manure, crop residues, and/or separated yard waste with an adjusted cellulosic content of at least 75% can be processed in such a digester in order to generate D3 RINs. (RINs are the currency of the RFS and are used by obligated parties as a compliance mechanism to meet the annual RVO mandate.) Food waste is categorized as a non-cellulosic fuel, i.e., it does not have a cellulosic content of at least 75%. “Food waste is essentially protein, sugar and fat,” notes Maureen Walsh, ABC’s federal policy director. “If an agricultural digester takes food waste as an input, it would have to go through a very rigorous and expensive testing process to prove it meets the adjusted cellulosic content of 75%.” The final rule includes a list of the feedstocks that agricultural digesters can process to have an adjusted cellulosic content of at least 75%.   READ MORE