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RFS: Renewable Volume Obligations – EPA Releases Draft 2018 Volumes
July 20, 2017 by Paige Anderson
Each year, EPA must finalize the amount of ethanol that will enter the market by November 30 for the following year’s obligations. To meet this deadline, EPA usually releases its draft proposal by early June to allow for enough time for public comments. This year, EPA released their draft proposed volumes for 2018 a bit later on July 5.
 
The EPA’s proposed Renewable Volume Obligations (RVOs) and percentage standards for 2018 are displayed in the tables. Prior final volumes and percentage standards for 2015, 2016 and 2017 are also listed for reference.
 
Volumes Used to Determine Proposed Percentage Standards
  2015 2016 2017 2018 2019
Cellulosic biofuel 123M gal 230M gal 311M gal 238M gal n/a
Biomass-based diesel 1.73B gal 1.90B gal 2.0B gal 2.1B gal 2.1B gal
Advanced biofuel 2.88B gal 3.61B gal 4.28B gal 4.24B gal n/a
Total renewable fuels 16.93B gal 18.11B gal 19.28B gal 19.24B gal n/a
All volumes are ethanol-equivalent, except for biomass-based diesel, which is actual.
 
Proposed Percentage Standards
  2015 2016 2017 2018
Cellulosic biofuel 0.069% 0.128% 0.173% 0.131%
Biomass-based diesel 1.49% 1.59% 1.67% 1.74%
Advanced biofuel 1.62% 2.01% 2.38% 2.34%
Total renewable fuels 9.52% 10.10% 10.70% 10.62%
 
As in years past, EPA is proposing to use its waiver authority to lower the various volumes below their statutory levels. The EPA’s RVO proposal for 2018 holds the level for non-advanced biofuels (generally corn ethanol) steady at 15 billion gallons, the amount required by law. Biomass-based diesel levels for 2018 and 2019 also remain steady at 2.1 billion gallons. Advanced biofuels see a slight decrease from last year’s numbers—dropping to 4.24 billion gallons. Cellulosic biofuels, however, took the biggest hit in the 2018 proposal, dropping from 311 million gallons last year to 238 million gallons this year, far below the 7.0 billion gallons that the Clean Air Act calls for. EPA notes that “renewable fuels will continue to play a critical role as a complement to our petroleum-based fuels,” but that “real-world challenges…have slowed progress towards meeting Congressional goals.”
 
The agency has also solicited comments on whether and how the current Renewable Identification Number (RIN) trading structure “provides an opportunity for market manipulation,” and how changes to that system might fix such concerns. In addition, EPA will begin a technical analysis on whether it should engage in the “reset” procedure, a process whereby EPA could, under the Clean Air Act, “reset” the statutory volume targets presuming certain conditions are met.
 
While EPA’s proposal requests comments on the RVO levels, it makes clear that it is not soliciting comments on all aspects of the RFS program. Specifically, EPA notes that it is not requesting comments on the definition of “obligated party.” As such, the point of obligation will remain where it has correctly been set—on refiners and importers, and not downstream entities. EPA will be holding a public hearing on August 1, 2017, in Washington, D.C. to hear comments on their draft proposal.
 
If you have any questions or would like more information, please contact Paige Anderson, NACS, director government relations, at panderson@convenience.org.
 
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