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EPA Finalizes Renewable Fuel Standard RFS Volumes for 2014 – 2016

 

The U.S. Environmental Protection Agency (EPA) finalized volume requirement for the Renewable Fuel Standard or RFS2.  The volumes include levels for 2014, 2015 and 2016. The new rules pave the way for increased use of renewable natural gas which qualifies under the federal program as a cellulosic fuel and as an advanced biofuel.

The RFS2 program has been hotly contested by opponents and supporters of the program.  Many organizations on both sides of the debate expressed their displeasure with the final rules. For biofuel  supporters, the concern is that the proposed levels announced fall far short of targets (see chart below) originally established for the program under the Energy Independence and Security Act of 2007(EISA). Oil industry advocates including petroleum marketers and retailers have expressed concerns that the higher levels unnecessarily increase fuel costs and require them to blend levels of ethanol into gasoline that could lead to problems for gasoline cars.

According to an EPA fact sheet released with the rule, the percentage of renewable fuel blended into the nation’s motor fuel supply will increase from 9.19 percent in 2014 to 10.10 percent in 2016 under these rules.  However, not all of this fuel is blended into gasoline as some biofuels are blended into diesel fuel, and others, like renewable natural gas, are consumed indirectly in alternative fuel vehicles.

The chart below shows the comparison between the statutory, proposed and finalized levels for the program:

   Renewable Fuel Standard Volume Levels (RFS2) 
(billion gls)EISA 2014EPA ProposalFinal 2014 VolumesEISA 2015EPA ProposalFinal 2015 VolumesEISA 2016EPA ProposalFinal 2016 Volumes
Cellulosic biofuel1.750.0330.03330.1060.1234.250.2060.230
Biomass-based diesel1.631.631.71.731.82.0
Advanced biofuel3.752.682.675.52.92.887.253.43.61
Total18.215.9316.2820.516.316.9322.2517.418.11

Note: Columns do not add up. Conventional ethanol levels not shown.  Gallons are ethanol equivalent gallons except for biomass diesel volume which are actual gallons.

The RFS2 rules are of interest to natural gas vehicle advocates because renewable natural gas qualifies as a cellulosic biofuel and advanced biofuel, and a number of natural gas companies are now actively engaged in facilitating the increased use of renewable natural gas in their businesses. Also, a number of major fleets have recently committed to using a larger percentage of renewable natural gas to fuel their NGVs. Renewable natural gas qualifies for valuable credits that can be sold to obligated parties under the RFS2 program, and these credits help offset the 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, and therefore is attractive to fleets that have aggressive environmental sustainability goals.

The final rule and other information about this program are available here.