RFA Welcomes Inclusion of High Octane Fuels in 2021-2026 CAFE/GHG Proposal

(Renewable Fuels Association) The Renewable Fuels Association (RFA) today welcomed the U.S. Environmental Protection Agency’s (EPA) request for public comments on how high octane fuels could facilitate engine efficiency improvements and reduced emissions under 2021-2026 fuel economy and tailpipe GHG standards for light-duty automobiles (CAFE/GHG).

The solicitation for comments on high octane fuels is part of EPA’s long-awaited proposed rule for 2021-2026 CAFE/GHG standards. According to EPA’s proposal, “Higher octane gasoline could provide manufacturers with more flexibility to meet more stringent standards by enabling opportunities for use of lower CO2 emitting technologies (e.g., higher compression ratio engines, improved turbocharging, optimized engine combustion).” EPA asks for comment on how it could “support the production and use of higher octane gasoline” to help enable compliance with CAFE/GHG requirements.

The proposal also highlights previous recommendations from the High Octane Low Carbon Alliance (HOLC), of which RFA is a founding member. EPA writes, “In the meetings with HOLC and the (Fuel Freedom Foundation), the groups advocated for the potential benefits high octane fuels could provide via the blending of non-petroleum feedstocks to increase octane levels available at the pump. The groups’ positions on benefits took both a technical approach by suggesting an octane level of 100 is desired for the marketplace, as well as, the benefits from potential increased national energy security by reduced dependencies on foreign petroleum.”

In response to today’s proposal, RFA Executive Vice President Geoff Cooper offered the following statement:

“For far too long, the CAFE/GHG program has focused only the effects of engine technologies on fuel efficiency and emissions, while failing to recognize the important role that the fuels themselves play in determining efficiency and emissions impacts. RFA has relentlessly advocated throughout the midterm evaluation process that the impact of fuel properties on efficiency and emissions must be considered, and we provided detailed information showing that high octane fuels can provide tremendous benefits. We are pleased to see that EPA’s proposal recognizes that high octane fuels can help enable more efficient engines and reduce GHG emissions, and we believe the Agency should use its authority to include high octane low carbon fuels as an option available to automakers for meeting more stringent fuel economy and emissions standards in the future.”

RFA submitted detailed comments on the EPA’s CAFE/GHG Midterm Evaluation, which are available here:

Excerpt from Energy and Environmental Study Institute: Buried within the nearly 1,000 page proposed rule is a nod to high-octane low carbon biofuels, which proponents have argued are the least-cost option to increasing fuel efficiency. But with automotive manufacturers already set to meet 37 miles per gallon, will there be any demand for high octane fuels that can bring even greater fuel efficiency?

Under the Obama administration, automotive manufacturers and the administration had agreed to reach 54.5 mpg by 2025 (these standards adapt to the makeup of the vehicle fleet), which could have been a huge driver for high octane fuels. However, low gas prices and a surge in the purchase of larger cars and trucks has put those ambitious goals in jeopardy for some time. Currently, the fleet average is set at 35.5 mpg for model year 2016, and the automotive industry is already on track to meet the 2020 level of 37 mpg. Citing technological feasibility of the standards, EPA and NHTSA finalized the mid-term review for model years 2021 – 2026 in the waning days of the Obama administration, but at the behest of the automotive industry, the Trump administration made re-assessing fuel efficiency standards a priority.

Touted by EPA as a compromise between safety, cost, and efficiency, the newly proposed Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule would mean an additional 500,000 barrels of oil consumption per day after 2020 and flat-lining efficiency. And while the automotive industry asked for a second look at fuel efficiency requirements that they say are increasingly difficult, if not impossible, to meet – they may be getting more than they bargained for.

While freezing fuel efficiency gains will save them money over the next several years as auto manufacturers are currently on a glide path to meeting 37 mpg, lower efficiency standards in the United States will only continue to be increasingly mismatched with higher efficiency and electric vehicle requirements in other major car markets. Additionally, early investors in electric vehicles, such as General Motors and Telsa, stand to lose big. The oil industry, while mum on the subject, appears to be the outright winner.

Widening gaps between various fuel efficiency standards will essentially create vastly different marketplaces that automotive manufacturers will have to develop and market vehicles for.

The biofuels industry let out a collective sigh of relief to see their efforts pay off in the proposed rule. In it, EPA and NHSTA ask for further comments of the potential of higher octane fuels, something the biofuels industry has advocated for quite some time. The EPA states that “Automakers and advocacy groups have expressed support for increases to fuel octane levels for the U.S. market.” Greater amounts of octane could either be provided by petroleum products or ethanol; the ethanol industry would like to see a fuel blend of approximately 25 percent ethanol, which would provide an octane rating of 98 (equivalent to today’s premium).

The biofuels industry is “pleased to see that EPA’s proposal recognizes that high octane fuels can help enable more efficient engines and reduce GHG emissions,” according to the Renewable Fuel Association’s Geoff Cooper. The industry is hopeful that they can make the case for higher ethanol blends as a good way to meet vehicle efficiency as well as reduce tailpipe emissions.

However, if efficiency standards only preserve the status quo – will there be an incentive to make a higher octane fuel blend available to consumers? It appears unlikely. READ MORE