As part of an effort to “re-set and strengthen” the Renewable Fuel Standard (RFS), the EPA set the corn ethanol mandate at its highest level ever, 15.25 billion gallons, for this year. Ethanol is cheaper than gasoline at present, so biofuel backers said consumers would benefit at the fuel pump with more ethanol in the gasoline supply.
Trade groups for corn growers and ethanol makers applauded the EPA announcement. “At long last, the RFS is being put back on track,” said Geoff Cooper, chief executive of the Renewable Fuels Association. The American Petroleum Institute, speaking for the oil industry, said the RFS was too high: “The final 2022 volumes exceed EPA’s own estimates of what the market can absorb and are likely to place additional pressures on refineries that are already running at full throttle to keep pace with demand.”
At 15.25 billion gallons, corn ethanol would provide the bulk of the 20.88 billion gallons in the RFS for this year. The 15.25 billion gallons included a “supplemental obligation” of 250 million gallons to satisfy in part a 2017 appellate court decision to increase ethanol use. The EPA said it would put a second supplemental obligation of 250 million gallons in the 2023 RFS. A proposed consent decree would require the agency to propose the RFS for 2023, the first year in which the EPA has a free hand in writing the regulation, by mid-September and finalize it by April 23, 2023.
Next-generation “advanced” biofuels were set at 5.63 billion gallons in this year’s RFS, down slightly from EPA’s initial proposal. Biomass-based biodiesel would account for nearly half of it, at 2.76 billion gallons. Advanced biofuels, such as ethanol made from grasses and woody plants, have been slow to come to the market despite hopes for development of fuels that did not compete with food crops for feedstocks.
Along with setting the RFS for this year, the EPA adjusted the 2020 RFS to 18.84 billion gallons, an increase of 320 million gallons from its proposal last Dec. 7, to reflect actual ethanol use for that year. It also finalized a regulatory framework to include so-called biointermediates in the RFS. Biointermediates are feedstocks that are partially converted in one facility and processed into a RFS-eligible biofuels at another facility. Earlier this year, the EPA proposed a regulation to admit renewable diesel and other biofuels made from canola oil into the RFS.
The EPA also said it would deny a set of previously pending requests by small refineries for exemptions from the RFS at various points from 2016-2021, and proposed alternative ways from small refineries to comply with the RFS in 2016, 2017, 2018 and 2020.
Nebraska Sen. Deb Fischer said the administration should have taken a stronger line against the oil industry with steps such as setting the 2020 ethanol mandate at the maximum 15 billion gallons despite the steep pandemic-driven decline on gasoline consumption. Conversely, the trade group American Fuel and Petrochemical Manufacturers said there was no escape valve for refiners this year. “Unachievable mandates will needlessly raise fuel production costs and further threaten the viability of small refineries, both at the expense of consumers,” said the AFPM.
The EPA summary of the RFS rules is available here.
A pre-publication version of the RFS rule is available here.
