On July 5, the U.S. Environmental Protection Agency (EPA) released its proposed volume standards under the Renewable Fuel Standard (RFS) — namely, the agency unveiled proposed Renewable Volume Standards for 2020 and Biomass-Based Diesel Volume Standards for 2021. The proposed volume standards are released annually over the summer and finalized in November. They inform obligated parties of their compliance obligations for the upcoming year.
This year’s proposed rule maintains the conventional biofuel standard at 15 billion gallons while providing an increase in the advanced biofuel and cellulosic biofuel standard by 120 million gallons. Biomass-Based Diesel volumes for 2021 would be maintained at 2.43 billion gallons. The proposed volumes offer modest growth for renewables, with all new gallons coming from cellulosic production. Despite the increase, cellulosic biofuel production continues to be far below statutory volume requirements.
The proposal was derided by many in the agricultural and biofuel industries for not securing a larger market for their products, nor limiting small refinery exemptions and the subsequent gallons that are lost by their use. Small refinery exemptions have become a hot-button issue with biofuel advocates, who want increased transparency over their use and for the gallons to ultimately be restored in the program through other obligated parties. Oil advocates argue that they have a right to protect sensitive business information and that the gallons removed should be retired permanently.
The proposed rule also notes that the EPA will be engaging in a “reset” of the program’s volume requirements. The RFS includes a provision that enables EPA to revisit volume obligations if the industry is unable to meet the statutory volume requirements over a period of time. In addition to the current comment period, this reset is going to set off an intense discussion over the future of the program.
The EPA will soon announce the date and time for a public hearing on their proposal. Interested parties will also have 30 days after the public hearing to submit comments. For more information about the proposed rule and other issues surrounding the Renewable Fuel Standard, contact Josh Andrews or Brandon Kirkham.
Read the proposed standards here.
