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U.S. EPA Releases Volumes for Renewable Fuel Standard (RFS2)

The U.S. Environmental Protection Agency (EPA) issued the long-awaited volume totals for the Renewable Fuel Standard, or RFS2.  The proposed volumes include levels for 2014, 2015 and 2016. As expected, the total amount of renewable fuel falls short of the targets prescribed by the Energy Independence and Security Act of 2007 (EISA). The chart below shows the comparison between the proposed levels and those set out in the statute:

Renewable Fuel Standard (RFS2)
(Billion ethanol gallon)EISA 2014EPA ProposalEISA 2015EPA ProposalEISA 2016EPA Proposal
Cellulosic biofuel1.750.0333.00.1064.250.206
Biomass-based diesel1.631.71.8
Advanced biofuel3.752.685.52.97.253.4
Total renewable fuel18.1515.9320.516.322.2517.4

Note: columns do not add up; conventional ethanol levels not shown.

Because EPA is late in issuing the 2014 levels, it has proposed a level that reflects the actual amount of renewable fuel that was sold in 2014.  A Fact Sheet issued by the agency reveals that it is exercising statutory authority to lower the prescribed levels because the levels set out in the statute “cannot be achieved.”  EPA has indicated that the levels are constrained by limitations on the volume of ethanol that can be consumed in motor vehicles, and also by the ability of industry to produce sufficient volumes of non-ethanol renewable fuels.

NGVAmerica is interested in this program because renewable natural gas qualifies as a cellulosic biofuel and many of our members are actively involved in producing, marketing and using renewable natural gas in their businesses.  Renewable natural gas qualifies for valuable credits under the RFS2 program and these credits help offset the higher cost of producing and marketing renewable natural gas.  In addition to being a domestic, renewable fuel, renewable natural gas provides significant greenhouse gas emission reductions when compared to conventional fueled vehicles.

The Coalition for Renewable Natural Gas has estimates that renewable natural gas used for transportation will account for about 295 million qualifying gallons in 2016.  Under the RFS2 gallon requirements are based on ethanol gallons; ethanol has approximately 75,700 Btu (LHV) per gallon whereas gasoline has about 112,000 – 115,000 Btu (LHV) per gallon.

EPA will hold a public hearing on this rulemaking on June 25 in Kansas City, Kansas.  Comments may be submitted until July 27, and a final rule is expected by November 30, 2015. EPA has posted additional information here.