EESI Asks EPA to Focus on Steps to Increase Volumes of Advanced and Cellulosic Fuels

On Monday, July 27, the comment period closed for the U.S. Environmental Protection Agency’s proposed renewable fuel volumes for 2014, 2015 and 2016.  The agency has been wrestling with the future direction of the Renewable Fuel Standard (RFS) for the last two years. Since the three year proposal was released in May, most of the biofuels industry’s focus has been on EPA’s interpretation of the legal definition of “adequate domestic supply” of renewable fuels in the RFS.

In comments to EPA, EESI points out that when Congress was debating the Renewable Fuel Standard, the meaning of “adequate domestic supply” was defined as qualifying fuel – not infrastructure constraints. For the first time, EPA’s proposed fuel volumes give credence to the E10 “blend wall,” by asserting that its ability to lower statutory volumes of fuels in the case of “inadequate domestic supply” may be applied in a situation where there is a “limitation in the availability of qualifying advanced biofuel and constraints on the ability to supply qualifying renewable fuels to the vehicles that use them.” This interpretation of the statute by EPA is not driven by a lack of overall supply of renewable fuels, but a lack of renewable fuels infrastructure.

Instead of capping renewable fuel use at 10 percent of the fuel supply in 2016, EESI instead urges the administration to focus on addressing many of the technical and administrative issues of the program that have hampered growth of advanced and cellulosic renewable fuels.  Indeed, EPA already has the authority to administer the program in a manner that is not only consistent with Congressional intent, but will easily pass through the so-called “blend wall”.  These steps may include:

• Holding obligated parties (i.e. oil companies) responsible for their role in perpetuating the “blend wall,”
• Work with automotive manufacturers, blenders to open the marketplace for mid-level blends,
• Address unintended consequences of Renewable Identification Numbers (RINs) and waiver credit markets,
• Resolve issues surrounding certification fuels,
• Eliminate unnecessary regulatory barriers for renewable fuels producers,
• Restore a reasonable FlexFuel Vehicle (FFV) credit,
• Fix the faulty MOVES2014 model, and
• Use Section 202 of the Clean Air Act to regulate toxic gasoline aromatics.

Many of these steps have to do with the technical administration of the program – but would have the net effect of increasing market stability, and in turn, the total volume of renewable fuels in the marketplace going forward.

While greater efficiency, electrification among the transportation sector and public transit will play a critical role in decarbonizing the transportation sector, without biofuels, it will be impossible to decarbonize the transportation sector in the timeframe made necessary by President Obama’s commitment to mitigate further climate change.

It is vitally important that the RFS remain a significant driver in ethanol levels above 10 percent of the gasoline supply. The RFS is helping to reduce GHG and lessen our dependence on petroleum. The RFS is critical and effective policy. EPA’s proposed action is causing a prolonged and chilling effect on the investment community and the biofuels industry overall, just as advanced biofuels are growing, and as many new technologies, feedstock and facilities are coming on line. EESI encourages EPA to re-evaluate the rollback of the 2016 RVOs, and their interpretation of “adequate domestic supply,” for the health of our citizens and our environment.