A proposal (Dec. 1, 2022) from the U.S. Environmental Protection Agency for 2023-2025 Renewable Fuel Standard volumes creates a clear pathway for sustainable growth in the production and use of low-carbon renewable fuels, according to the Renewable Fuels Association.
“EPA’s proposed rule solidifies a role for the Renewable Fuel Standard in future efforts to reduce carbon emissions and enhance our nation’s energy security,” said RFA President and CEO Geoff Cooper. “Once finalized, this rule will significantly accelerate growth and investment in the low-carbon renewable fuels that will help decarbonize our nation’s transportation sector, extend domestic fuel supplies, and bolster the rural economy. By including three years’ worth of RFS volumes, EPA’s proposed rule will finally provide certainty and stability for the entire supply chain. EPA Administrator Michael Regan put the RFS program back on track with the 2022 volume obligations, and today’s proposal builds upon that solid foundation. RFA thanks Administrator Regan and the Biden administration for continuing to make good on their commitment to grow the marketplace for lower-carbon, lower-cost renewable fuels.”
EPA proposes to set the 2023 total RFS requirement at 20.82 billion gallons (bg), with 5.82 bg coming from advanced biofuels and 15 bg from conventional renewable fuels like corn ethanol. In addition, EPA proposes to add a supplemental volume of 250 million gallons on top of the 2023 standards to address a 2017 decision from the D.C. Circuit Court in a case brought against EPA by RFA and other leading farm and biofuel groups.
For 2024, EPA proposes a total RFS volume of 21.87 bg, comprising 6.62 bg of advanced biofuel and 15.25 bg of conventional renewable fuels. In 2025, EPA proposes to require 22.68 bg of total renewable fuel, including 7.43 bg of advanced biofuel and 15.25 bg of conventional renewable fuel.
Cooper noted that these renewable volume obligations also would stimulate rapid growth in E15 and E85, making it that much more important that a resolution is found for allowing year-round sales of E15, especially with new legislation filed this week with the support of RFA, the American Petroleum Institute and others.
Meanwhile……
The Clean Fuels Alliance America criticized (Dec. 1, 2022) the Environmental Protection Agency’s proposed Renewable Fuel Standard volumes for 2023 and beyond for undercutting investments in biodiesel and renewable diesel capacity. The minor increases for biomass-based diesel volumes in 2023, 2024 and 2025 are below the industry’s existing production and ignore the clean fuels industry’s significant investments in new capacity. The volumes provide no additional space for sustainable aviation fuel and short-circuit the nation’s goals to cut carbon emissions.
“EPA’s overdue set proposal significantly undercounts existing biomass-based diesel production and fails to provide growth for investments the industry has already made in additional capacity, including for sustainable aviation fuel. The volumes EPA is proposing for 2023, 2024 and 2025 ignore the more than 3 billion gallons currently in the market and fail to take into account the planned growth of the clean fuels sector,” said Clean Fuels Vice President of Federal Affairs Kurt Kovarik.
EPA’s data from the RFS program show that the U.S. market reached 3.1 billion gallons of biomass-based diesel in 2021 and already 2.9 billion gallons through October 2022, with two months still to go. The Energy Information Administration’s Short Term Energy Outlook, which informs EPA’s decisions on annual RFS volumes, currently projects a 500-million-gallon increase in biodiesel and renewable diesel consumption for 2023. EIA has also projected 2.4. billion gallons of added renewable diesel capacity coming online by 2024 and calculated another 1.8 billion gallons in announced planned capacity.
“The biodiesel and renewable diesel industry has already made considerable investments in production capacity and distribution infrastructure that will come online by 2025. The soybean and canola industries have invested more than $4 billion to bring additional feedstock capacity online over the next several years,” Kovarik continued. “EPA’s proposed biomass-based diesel volumes undercut those investments.”
EPA’s proposed biomass-based diesel volumes for 2023 and beyond:
| (billion gallons) | 2023 | Growth from 2022 | 2024 | Growth from 2023 | 2025 | Growth from 2024 |
| Biomass-based diesel | 2.82 | 0.06 | 2.89 | 0.07 | 2.95 | 0.06 |
Clean Fuels appreciates EPA’s final rule creating a pathway to produce renewable diesel, jet fuel, heating oil, naphtha, and liquefied petroleum gas (LPG) from canola oil, which will generate even more biomass-based diesel and advanced biofuel gallons for the program. The approval enables a more diverse feedstock supply for the clean fuels industry. But the potential growth is not accounted for in the proposed volumes.
Clean Fuels supports EPA’s proposed alternative compliance method to document points of origin for used cooking oil supplies under separated food waste plans. This method will allow small producers to continue using a low-carbon feedstock and rely on documentation from used cooking oil aggregators.
“The clean fuels industry is meeting and exceeding all of the statutory factors that EPA is supposed to consider when setting volumes,” Kovarik added. “Our industry’s growth can generate new jobs and increase economic opportunities for growers, fuel producers and other economic sectors. Increasing production of clean fuels improves U.S. energy security, lowers diesel fuel prices, and generates carbon and emission reductions today that are necessary to meet future national environmental goals.”
Recently, Clean Fuels published a new study, “Economic Impact of Biodiesel on the U.S. Economy 2022,” conducted by LMC International. The study finds that based on 2021 market data, the biodiesel and renewable diesel industry produced 3.1 billion gallons and generated $23.2 billion in economic activity, while supporting 75,200 jobs paying $3.6 billion in annual wages in the United States. For every 100-million-gallon increase in domestic clean fuel production, the direct, indirect and induced economic activity increases by $1.09 billion and U.S. jobs grow by 3,185. The largest economic and employment benefits occurred in the farming, oilseed processing, and fuel production sectors.
The study further calculates that producing 6 billion gallons of clean fuels in the United States would increase overall economic activity from the current $23.2 billion to $61.6 billion and support 187,003 jobs earning $8.8 billion in wages. The construction of additional capacity would increase economic activity by an added $4.3 billion and support an additional 144,500 related temporary jobs earning $5.8 billion in wages.
When setting RFS volumes, EPA must consider the infrastructure and rate of future commercial production for advanced biofuels like biodiesel, renewable diesel and SAF. According to the Energy Information Administration, biodiesel and renewable diesel capacity is already 750 million gallons higher in 2022 compared 2021. EIA’s Short Term Energy Outlook projects availability of 3.9 billion gallons of biodiesel and renewable diesel in 2023. Further, USDA’s successful Higher Blends Infrastructure Incentive Program has already supported infrastructure investments for an additional 1 billion gallons of biodiesel. Congress has made a strong commitment to continue infrastructure grants through 2030.
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