EPA Will Likely Propose Reduced Biofuel Standards in 2018

Environmental Protection Agency Administrator Scott Pruitt testifies before a Senate Appropriations Subcommittee on Capitol Hill in Washingt

Environmental Protection Agency Administrator Scott Pruitt testifies before a Senate Appropriations Subcommittee on Capitol Hill in Washingt

The U.S. Environmental Protection Agency (EPA) announced today the proposed Renewable Volume Obligations (RVO) for the 2018 conventional biofuels requirement at 15 billion gallons under the Renewable Fuel Standard (RFS). Overall, the proposed RVOs require approximately 19.24 billion gallons of renewable fuels in 2018.

The agency would keep the 2018 target for conventional ethanol at 15 billion gallons, unchanged from 2017, and set the requirement for advanced biofuels, including cellulosic ethanol, at 4.24 billion gallons.

The proposal would require refiners use 19.24 billion gallons of renewable fuels in 2018, slightly down from the 19.28 billion gallons required in 2017 and about 25 percent lower than the target Congress outlined in 2007.

The proposal is "consistent with market realities focused on actual production and consumer demand while being cognizant of the challenges that exist in bringing advanced biofuels into the marketplace", Pruitt said in a statement.

"Acknowledgment of the high cost of compliance has been a long time coming, and we are grateful that this EPA proposal comes closer to reflecting what the market has shown year after year - the mandated levels of advanced, cellulosic, and biodiesel in the RFS are unrealistic".

Higher ethanol blends, such as E15, can damage engines and fuel systems, according to extensive testing by the auto and oil industries-potentially forcing drivers to pay for costly repairs. The Iowa Renewable Fuels Association said that the new regulations keep Trump's promise to support corn interests but failed the broader biofuel industry.

Donald Trump campaigned on a promise of supporting renewable fuels like corn-based ethanol that have become key to the farm economy.

"Unfortunately, a change in administrations did not change the EPA's underappreciation for the potential of USA biodiesel production", the trade group told the Washington Examiner.

However, the levels for advanced biofuels drew criticism. "Keeping biodiesel levels frozen at 2.1 billion falls short of USA industry capabilities, even before imports are considered". He and others said it was the first ever reduction in the category since creation of the Renewable Fuel Standard, or RFS, in 2005. "Today's proposal reaffirms the importance of RFS reform, as it is essential that Americans have access to fuels they want and can safely use in their vehicles". "Congress must fix this broken, outdated program".

Republican Senators Ernst and Grassley called the decision a 'mixed bag.' Senator Ernst saying, "While I am pleased the new administration has set the proposed volume requirements for conventional ethanol for 2018 at congressionally approved levels, I am disappointed that the 2019 biodiesel number was held constant, and would like to see it more accurately reflect current domestic usage and production capacity". They both said they would continue to work to promote the industry.

Iowa Democrats also expressed their disappointment.

The EPA is expected to open a 45-day public comment period on the proposed rule following its publication in the Federal Register.

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