Industry Strongly Criticizes EPA Biofuel Proposal

The U.S. Environmental Protection Agency (EPA) has released its proposed volume requirements under the Renewable Fuel Standard (RFS) program for cellulosic biofuel, advanced biofuel, and total renewable fuel for calendar year 2020. EPA also proposed biomass-based diesel volume standards for calendar year 2021. The proposed volume requirements call for a total of 20.04 billion gallons of renewable fuel in 2020 and only 2.43 billion gallons of biomass-based diesel in 2021.

Biodiesel Industry Pushes Back

The biomass-based diesel volume for 2020, finalized in late 2018, also called for 2.43 billion gallons. In setting the biomass-based diesel requirement for 2021 at 2.43 billion gallons, EPA effectively proposes to flat-line growth in the domestic production of biomass-based diesel fuels, including biodiesel and renewable diesel. National and state associations representing biomass-based diesel producers, distributors, and blenders severely criticized the EPA’s proposal.

“EPA’s proposed rule would turn the RFS program on its head,” said Kurt Kovarik, Vice President of Federal Affairs for the National Biodiesel Board. “It is likely to reduce America’s use of cleaner, lower-carbon biodiesel and renewable diesel for transportation over the next several years... The proposal sends a chilling signal to America’s biodiesel and renewable diesel producers of EPA’s intent to limit market growth for cleaner fuels. EPA appears to have simply repeated the previous biomass-based diesel volume of 2.43 billion gallons for 2021 without analyzing our industry’s ability to achieve higher volumes.”

In addition to stalling growth of biomass-based diesel, the EPA has once again neglected to factor small refiner exemptions (SREs) or so-called “hardship waivers” into its volume requirements. Under the RFS program, oil refiners must either purchase domestically produced biofuel, purchase equivalent Renewable Identification Number (RIN) credits, or apply for SREs that allow them to bypass these requirements. Under the Trump administration, SREs have been issued with much greater frequency, raising the ire of biofuel producers who claim the waivers have been granted without proper review.

“...EPA refuses to reconcile its RFS rules with its small refinery exemption handout spree,” Kovarik said. “EPA Administrator Andrew Wheeler asserts that by law he must grant RFS hardship exemptions to every refiner that asks. Yet in the proposed rule, EPA claims it can’t possibly predict whether oil refineries will once again take advantage of EPA’s open spigot on these handouts. We know that Administrator Wheeler’s public statements and EPA’s calculation of small refinery exemptions in the annual volumes can’t both be true.”

At a recent event in Iowa, President Trump stated that he would order the EPA to reevaluate its SRE practices. How this might impact future RFS volume requirements remains to be seen.

NEFI Shares Biodiesel Industry Concerns

Throughout the  U.S. Northeast, NEFI members produce, blend, store, and distribute biodiesel blended heating oil, commonly known as Bioheat® fuel. This fuel is helping to meet state and local greenhouse gas emissions goals and keep heating oil viable in a competitive market. NEFI opposes policies that might discourage biofuel production, make biofuels less competitive, and increase costs for our members and their customers.

“Our industry needs a robust biodiesel industry to continue providing consumer choice and meet our stated objective of reducing greenhouse gas emissions,” said NEFI President Sean Cota. The administration’s proposal, which does little more than maintain the status quo, “is inconsistent with a growing and competitive Bioheat market,” Cota said.

NEFI will file public comments with the EPA on the proposed renewable volume obligations (RVOs) and small refiner exemptions (SREs).

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