IN one of its final actions before leaving office, the Obama Administration heeded many agricultural groups' call for an increase in the Renewable Fuel Standard (RFS), as the Environmental Protection Agency announced Nov. 23 that it would raise the RFS volume obligations from the initial proposal to meet the 15 billion gal. obligation set by Congress.

The action in the annual rule-making, which was required by Nov. 30, finalizes the volume requirements and associated percentage standards for cellulosic biofuels, advanced biofuels and total renewable fuels for 2017 and for biomass-based diesel for 2018 (Table).

The final version calls for 200 million gal. more for 2017 compared to the proposed standards. This is the first time that EPA has reached the statutory level for traditional corn-based ethanol.

The Iowa Renewable Fuels Assn. (IRFA) said EPA "clearly took into account excess corn stockpiles growing to levels not seen in decades, record U.S. ethanol production and record levels of ethanol exports. Instead of forcing ethanol overseas, more of these gallons will now be used to lower U.S. gasoline prices."

IRFA added, "Further, data from the U.S. Energy Information Administration clearly shows that the U.S. routinely breaks the fictitious E10 blend wall inaccurately touted by some in the oil industry to protect their near-monopoly. Finally, EPA's own RFS tracking system shows that, so far in 2016, renewable fuels use in the U.S. actually exceeded the originally proposed levels for 2017."

The National Chicken Council (NCC) claimed that in setting the 2017 volume at 15 billion gal., EPA has "breached the 10% blend wall and effectively surpassed the statutory cap on ethanol set in the 2007 Energy Independence & Security Act."

In the statute, Congress set a cap on conventional ethanol at 15 billion gal. to prevent ethanol production from artificially diverting too great a volume of corn from feed, food and seed use to energy use, NCC said. At the time Congress set this cap, ethanol exports were not envisioned. However, according to the Energy Information Administration, U.S. exports have averaged nearly 840 million gal. in the past two years and are trending even higher for the first three quarters of 2016.

"Ethanol exports add nothing to U.S. energy security, and the RFS is not being administered in keeping with congressional intent," NCC president Mike Brown said.

Ethanol supporters have argued that EPA did not have the authority to reduce congressionally mandated levels due to the circumstances over the last few years. Many praised EPA for following the law and keeping the "RFS on track."

"Although we believe the EPA did not have authority to reduce the ethanol numbers in the first place, we are pleased to see the (renewable volumes) finally back on track," said Wesley Spurlock, president of the National Corn Growers Assn.

Biodiesel falls short

EPA chose to maintain the biomass-based diesel volumes for 2018 at 2.1 billion gal., the same level in the initial proposed rule. While it represents a 100 million gal. increase in the RFS biomass-based diesel volume from 2017, it is roughly the same amount of biomass-based diesel utilized in the U.S. in 2015.

The new RFS rule would set advanced biofuels at 4.28 billion gal. in 2017, up from 3.61 billion gal. in 2016, with biomass-based diesel continuing to fill a large portion of the advanced biofuel program.

The new standards reflect modest growth but remain below the more than 2.6 billion gal. of biodiesel and renewable hydrocarbon diesel expected in 2016.

American Soybean Assn. (ASA) president Richard Wilkins said although EPA raised the total advanced biofuel volume by 19% from the proposed rule, the agency chose not to raise the biomass-based diesel volume requirements within that advanced biofuel pool for 2018.

"When EPA issued its proposed rule, ASA clearly stated that the 2.1 billion gal. mark did not adequately capture the capacity of the biodiesel industry," Wilkins said. "To see the volume remain at 2.1 billion gal., as (it was) in the proposed rule, is frustrating. We know we can do more."

Volume:88 Issue:12