Monday, June 1, 2015

EPA Proposes New Update to Renewable Fuel Standard

On May 29, 2015, the Environmental Protection Agency released proposed updates to the Renewable Fuel Standard (RFS), which seeks to regulate the amount of biofuels to be blended into conventional gasoline. The standards were created with the reduction of greenhouse gases and reliance on foreign oil in mind.

The proposed standards call for a total volume of 17.4 billion gallons of biofuels by the end of 2016, short of the original 22.25 billion gallon mandate set out by Congress. The proposal also calls for an increase in “advanced biofuels”, a miscellaneous category that includes fuels made from leftover agricultural products like corn stalks and husks to converted fuels from sugar cane and soybean oil, as well as waste oil and greases, to help reach the volume requirements.

The EPA states that the lower standards reflect the difficulties in the market to accommodate the rising levels of ethanol and the lack of availability of non-ethanol sources, citing the Clean Air Act as the source of authority to alter the volume requirements in the original RFS.

The announcement has been met with criticism from both sides, stating that the new proposal doesn’t serve to meet the asserted goals of the RFS, and that the EPA fails to work to circumvent the “blend wall” that stands in the way of further adopting ethanol fuels. Most U.S. gasoline is currently ten percent ethanol, and AAA estimates that only fifteen percent of U.S. vehicles could handle more, limiting the ability to increase ethanol volume beyond the existing percentage.

The proposal will be open for public comment until July 27, 2015, and finalization is planned for November 30, 2015.

Written by Tyler R. Etter - Research Assistant
June 1, 2015

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