The Road Ahead for the RFS

by Luke Geiver (Ethanol Producer Magazine) Starting now, the U.S. EPA—with input from other agencies—will have new guideposts and increased interpretive authority for determining the annual renewable volume obligations of the RFS. -- Starting in 2023, the Renewable Fuel Standard’s yearly required volumes will no longer be based on the firm statutory instruction of federal law. The U.S. Environmental Protection Agency, along with the U.S. Department of Agriculture and the U.S. Department of Energy, will be determining—with new formulas not prescribed by Congress—renewable volume obligations, or RVOs. The change marks the first time since the formation of the RFS in 2005 that yearly RVOs will not be determined strictly by legislative instruction.

The EPA was authorized to set annual biofuel blending requirements through 2022. For 2023 and beyond, however, the agency is required to establish volume requirements according to a specific set of alternative factors. Ethanol trade groups emphasize that the RFS is not expiring, but entering a new phase in which the EPA, with support from the USDA and the DOE, has more leeway in its administration of the program. The upcoming “set” rule will be the first annual RVO rulemaking under which the EPA exercises this discretion.

Through a consent decree agreement, the EPA publicly went on the record, agreeing to offer proposed volumes for 2023 by November 16, 2022. That agreement also states that by June 14, 2023, volume requirements under the RFS will be finalized.

During a virtual briefing about the RFS set held by Fuels America in late September, he (RFA President and CEO Geoff Cooper) said a strong set rule can help meet the Biden administration’s decarbonization goals. “We think EPA has an enormous opportunity with this rulemaking process to further decarbonize our nation’s transportation fuels, and ... I want to remind everyone that the RFS is the only statutory program on the books today that requires fuel decarbonization.”

The story of ethanol should be about how it provides a robust contribution to lowering greenhouse gas emissions, lowers fuel costs and plays a strong part in the long-term climate strategy of the U.S. According to Kakesh (Joe Kakesh, general counsel for Growth Energy), that storyline is what should happen as the EPA’s decision on 2023 RVOs plays out. But, he points out, there are many factors that impact what ultimately will happen.

The Main Factors
To arrive at significant RVOs through the RFS for 2023 and beyond, the EPA has publicly stated it will utilize six factors to aid in the process. The first factor is the impact of production and use of renewable fuels on the environment, including on air quality, climate change, conversion of wetlands, ecosystems, wildlife habitat, water quality and water supply. The second relates to how a renewable fuel can impact U.S. energy security. The expected annual rate of future commercial production of renewable fuels, including advanced biofuels such as cellulosic or biomass-based diesel, represents the third factor. How renewable fuel impacts U.S. infrastructure, including deliverability of materials, goods and products other than renewable fuel, along with the sufficiency of infrastructure to deliver and use renewable fuel, is the fourth area the EPA will look at. The cost of renewable fuel to consumers is the fifth. And the sixth factor is the impact of renewable fuels on job creation, the price and supply of agricultural commodities, rural economic development and/or food prices.

In addition to those main six factors, the EPA has already stated that it also has “the authority to consider other factors.” The agency has already considered some of those factors, including the intertwined nature of compliance with 2020 to 2022 standards, the size of the carryover RIN bank, how the entirely retroactive nature of the 2020 and 2021 standards—as compared to the partially prospective nature of the 2022 annual and supplemental standards—affects the feasibility of compliance, the supply of qualifying renewable fuels to U.S. consumers, soil quality, and environmental justice.

There is an important element to all of the factors, especially those main six, according to Kakesh.
“The key is that not all six factors are equal,” he says.

The EPA has addressed that important fact. " ... With the lack of precedence or past guidance on how the EPA might weigh the factors in making its decisions, the agency says it has “considerable discretion to weigh and balance the various factors.”

Many, including Kakesh, believe the leading factor the EPA will weigh above all others is the environmental benefit of biofuels versus fossil alternatives.

Although the last time the EPA updated its lifecycle emissions modeling related to ethanol was in 2010, there has been work to bring modern science and testing on the subject into the EPA’s view. In March, EPA hosted a virtual public workshop on biofuel GHG modeling.

The purpose of the three-day workshop, which included industry experts talking or giving presentations on a range of subjects, was three-fold. First, the EPA wanted commentary on what sources of data exist and how those data sets can be used to inform the assumptions that drive GHG estimates. Second, EPA wanted to know how it should best characterize the sources of uncertainty associated with quantifying the GHG emissions associated with biofuels. And third, EPA wanted to know what models are available to evaluate the lifecycle GHG emissions of land-based biofuels, and “if those models meet the Clean Air Act requirements for quantifying the direct and significant indirect emissions from biofuels.”

The GREET model is a one-of-a-kind analytical tool that simulates the energy use and emissions outputs of various vehicle and fuel combinations. It was started in 1995, but updated and expanded every year since by the DOE’s Office of Energy Efficiency and Renewable Energy.

Growth offered clarity to that point. “As several workshop presenters noted, it will not be possible to resolve every uncertainty related to biofuels LCAs in the time remaining before EPA must promulgate upcoming major rulemakings,” the organization wrote in its comments to the workshop.

To aid the EPA in its quest for the best science, Growth offered a study from EH&E, a multi-disciplinary team of environmental health scientists and engineers with expertise in measurements, models, data science, LCA and public health. The study, “Carbon Intensity of Corn Ethanol in the United States: State of the Science,” provided a meta-analysis of available LCA methodologies. The study gave a central estimate LCA for corn starch ethanol of 51gCO2e/MJ, or 46 percent below the 2005 petroleum baseline. Numbers that clearly show the positive impact of ethanol in any discussion on climate goals and overall CI reduction.

What Could Happen
Kakesh believes the EPA will set volume requirements for the next two years. The current administration’s goal of getting to net zero carbon by 2050 is not possible without biofuels, he adds.

After the November numbers are provided, the proposed volume obligations will be reviewed until June 2023, at which time, the EPA will have to finalize RVOs. READ MORE