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Agricultural News

EPA Maintains Key RFS Volumes for 2013, Signals Potential Changes to 2014 Volumes

Wed, 07 Aug 2013 11:51:12 CDT

EPA Maintains Key RFS Volumes for 2013, Signals Potential Changes to 2014 Volumes
The United States Environmental Protection Agency (EPA) announced Tuesday the finalization of its proposed Renewable Fuel Standard (RFS) volume requirements for 2013 for conventional biofuels, cellulosic biofuels, and the total amount of Advanced Biofuels. EPA had previously finalized the 2013 volume requirements for biomass-based diesel at 1.28 billion gallons.

Tuesday's announcement finalizes the requirement for total Advanced Biofuel at 2.75 billion gallons. The Advanced Biofuel requirement is important to the biodiesel industry because biodiesel - as an EPA-designated Advanced Biofuel under the RFS - can fill not just the Biomass-based Diesel requirement of the program but also part, or all, of the overall Advanced Biofuel requirement. The decision to maintain the Advanced requirement at 2.75 billion gallons offers an additional market opportunity for biodiesel above and beyond the minimum 1.28 billion gallon Biomass-based Diesel requirement for 2013.

"As producers of the feedstock that accounts for more than half of all domestic biodiesel production, we are very pleased with today's announcement," said ASA President Danny Murphy, a soybean farmer from Canton, Miss. "The updated volumes for 2013 will allow the promising growth of the biodiesel industry to continue unhindered, and we appreciate Administrator McCarthy and the EPA's work to see that through."

EPA also announced it has denied two petitions for reconsideration of the 2013 biomass-based diesel standard of 1.28 billion gallons. These appeals were submitted by petroleum groups in late November 2012, raising a number of issues, including the impact of the 2012 drought and concerns about fraudulent RINs. The EPA determined that the petitions failed to meet the requirements for reconsideration under the Clean Air Act.

"During the confirmation process, Administrator McCarthy repeatedly expressed her commitment to building bridges between the agricultural community and the EPA, and this announcement, which recognizes the strengths and benefits of the RFS and takes into account both the current and potential capabilities of the industries that produce these biofuels is a pragmatic and constructive step toward doing just that," Murphy said.

In addition to confirming the 1.28 billion gallon requirement for biomass-based diesel and the 2.75 billion gallon requirement for total Advanced Biofuels, the EPA's announcement imposes the following requirements for 2013:

--Cellulosic biofuel: 6 million gallons. This is a reduction from the 14 million gallons previously proposed by EPA for 2013 and the 1 billion gallons called for under the statute. EPA's action to reduce the cellulosic biofuel requirement recognizes that significant quantities of cellulosic biofuels are not yet available in the marketplace.

--Conventional biofuel (mostly corn ethanol): 13.8 billion gallons. This quantity maintains the volumes required under the statute for 2013.

--Total renewable fuel: 16.55 billion gallons.

Also of significance in Tuesday's announcement, EPA indicated it likely will reduce below statutorily-set levels the total conventional biofuels and total Advanced Biofuels requirements for 2014 in a forthcoming proposal. In making these indications, EPA appears to be responding to concerns about the increasing volumes of conventional, cellulosic, and Advanced biofuels called for in 2014 under the RFS statute versus the quantity of such fuels available in the marketplace and the impacts of the impending ethanol blend wall.

"EPA's actions to reduce the cellulosic biofuel requirement for 2013, and to indicate that it will likely reduce the total Conventional and Advanced Biofuel requirements from those set in the statute," added Murphy, "can be seen as proof that EPA has the flexibility it needs to adjust volume requirements under the RFS based on marketplace realities and that no legislation is needed to revise or repeal the RFS."



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