No matter the criticisms biofuel groups had about the job performance of Scott Pruitt and Andrew Wheeler as EPA administrator, they could all agree on one thing: under their leadership, annual biofuel volume targets were always published on time.
That won’t happen this year.
EPA is not expected to meet the statutory Nov. 30 deadline established in the law that created the Renewable Fuel Standard, and supplemental rulemaking to address gallons waived through Small Refinery Exemptions is said to be the holdup.
“That comment period doesn't close until November 29th,” Renewable Fuels Association President and CEO Geoff Cooper told Agri-Pulse. “Certainly, EPA is going to need more than a day to look at all the comments that it received and that supplemental will absolutely have some impact on how the 2020 final RVO rule ends up.
Cooper estimated a “mid-to-late December” release of the RVO, which is expected to include 2020 blending targets and EPA’s plan to address SREs. Another lobbyist suggested in an email to Agri-Pulse the EPA could be aiming for Dec. 20, but could slip to Dec. 27. In a statement, an EPA spokesperson referenced the Nov. 29 comment period deadline on the supplemental rulemaking and said "the Agency will review and respond to all comments and hopes to finalize the rule this winter."
Geoff Cooper, RFA
EPA previously published a proposal in October to use recommendations issued by the Department of Energy to calculate the three-year rolling average of waived gallons to be incorporated back into the RVO. That news infuriated biofuel supporters who were expecting the rolling average to be based on actual gallons exempted from the biofuel mandate by EPA-issued SREs.
“The volume matters to us, but the mechanism by which they do it matters as well,” American Coalition for Ethanol CEO Brian Jennings told Agri-Pulse. “And what we’ve argued all along is that if EPA is going to issue any small refiner a hardship exemption — which is fine — the ethanol and the biodiesel that the small refinery would have been blending needs to be reallocated to the rest of the refiners.”
Refiners have shown resistance to that notion, claiming it punishes facilities that are already compliant with the mandate by forcing them to make up for lost volume due to SREs granted to other refineries.
With the comment period closing later this week, notes are trickling in from trade groups asking EPA to use their own allocations rather than DOE’s recommendations, which Cooper said are “about half of what the actual exemptions were.”
For its part, the National Corn Growers Association tells the EPA “redistributing exempted gallons through the RFS volume formula only works to account for waivers if the projections for waived gallons are accurate,” adding that the current proposal “does not ensure sufficiently accurate projections for waived gallons.”
Brian Jennings, ACE
While the SREs have received a lot of the attention, the annual RVOs also feature the annual battle over just how many gallons of renewable fuels should be blended into the nation’s gasoline and diesel supplies. EPA’s proposed volumes, released in July, suggested 20.04 billion gallons of biofuels, 15 billion gallons of which are slated to be conventional corn ethanol.
The 15 billion-gallon corn ethanol target is an annual priority for biofuel groups, but they’re also hoping to see greater growth in advanced biofuel RVOs like biodiesel and cellulosic biofuels. The biodiesel mark, which is always set a year in advance, was set at the same volume as was called for in the previous RVO, 2.43 billion gallons. The cellulosic biofuel target — a 122-million-gallon jump to 540 million gallons — represented the only increase in year-over-year volumes.
The cellulosic target, which has been consistently below statutory targets because of lagging development in the industry, is also set to trigger a “reset” of the volumes, giving EPA the chance to set new volume levels for the category. That, combined with the expiration of statutory volumes set by Congress in 2022, has biofuel backers a little nervous for what might be ahead.
“EPA’s track record isn’t great on the RFS,” Jennings said, pointing to legal challenges filed by during both the Obama and Trump administrations. “RFS implementation has been riddled with problems really from the get-go, so we’re always concerned about the annual RVO and certainly the upcoming reset.”
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