The U.S. Environmental Protection Agency (EPA) announced final volume requirements under the Renewable Fuel Standard (RFS) program to meet a Nov. 30, court-imposed deadline following years of delay.
Oil companies need to use 18.1 billion gallons of renewables in 2016, up from the 17.4 billion gallons that the EPA proposed in May, but still short of a target of 22.25 billion gallons established by the U.S. Congress in 2007.
The RFS program was implemented in 2005 to reduce U.S. dependence on foreign oil and utilize cleaner, domestic energy sources. Renewables were meant to represent an increasing share of transportation fuels, but the plan met challenges when a slow economic recovery and increasing fuel efficiency prompted fuel demand to fall earlier than many had expected.
The EPA's plan outlined increasing targets of renewables to use, beginning with retroactive targets for 2014 and for the current year.
“The biofuel industry is an incredible American success story, and the RFS program has been an important driver of that success—cutting carbon pollution, reducing our dependence on foreign oil, and sparking rural economic development,” said Janet McCabe, the acting assistant administrator for the EPA’s Office of Air and Radiation.
“With today’s final rule, and as Congress intended, EPA is establishing volumes that go beyond historic levels and grow the amount of biofuel in the market over time. Our standards provide for ambitious, achievable growth.”
The final RFS is an important part of the Obama Administration’s strategy to take action on climate change by propelling the U.S. toward a clean energy future. With final standards in place for the year ahead, biofuel producers and blenders are in a better position to plan and invest – putting the market on stable ground and supporting further growth and innovation in the renewable fuels industry, the EPA said. However, political representatives from corn farming states, which produce the feedstock for ethanol, said the targets should be increased to those agreed in 2007.
"The EPA doesn't seem to appreciate that the law on the books requires strong biofuels targets and that consumers like the chance to use alternate fuels," said Chuck Grassley, a Republican senator from Iowa.
Critics of the program question the environmental benefits of corn-based ethanol and whether greater amounts of the renewable fuel can be used without bigger infrastructure changes.
The final 2016 standard for cellulosic biofuel — the fuel with the lowest carbon emissions — is nearly 200 million gallons, or seven times more, than the market produced in 2014. The final 2016 standard for advanced biofuel is nearly 1 billion gallons, or 35%, higher than the actual 2014 volumes; the total renewable standard requires growth from 2014 to 2016 of more than 1.8 billion gallons of biofuel, which is 11% higher than 2014 actual volumes. Biodiesel standards grow steadily over the next several years, increasing every year to reach 2 billion gallons by 2017.
The RFS requires EPA to set annual volume requirements for four categories of biofuels. The final rule considered more than 670,000 public comments, and relied on the latest, most accurate data available. EPA finalized 2014 and 2015 standards at levels that reflect the actual amount of domestic biofuel used in those years, and standards for 2016 (and 2017 for biodiesel) that represent significant growth over historical levels.
The final rule also sets out revised compliance dates for refiners and other parties.