EPA Slashes Cellulosic Biofuels Mandate

August 7, 2013 The EPA has slashed the amount of cellulosic biofuels that refiners must blend into their gasoline and diesel, from its initial proposal for 14 million gallons of cellulosic biofuel to 6 million gallons in the final 2013 requirement. The rule, issued yesterday, sets percentage standards for four fuel categories that are part of the Renewable Fuel Standard program. The final 2013 overall volumes and standards require 16.55 billion gallons of renewable fuels to be blended into the US fuel supply— a 9.74 percent blend. This standard specifically requires: Biomass-based diesel (1.28 billion gallons; 1.13 percent) Advanced biofuels (2.75 billion gallons; 1.62 percent) Cellulosic biofuels (6 million gallons; 0.004 percent) The biomass -based diesel and advanced biofuels requirements are the same as originally proposed by the agency in February. In all, the 2013 quotas represent an almost 9 percent increase over the 2012 mandated renewable fuel volume of 15.2 billion gallons. The EPA is also giving refiners more time to comply with the 2013 volume requirements by expending the deadline by four months, to June 30, 2014. During this rulemaking, the agency says it received comments from a number of stakeholders concerning the “E10 blend wall.” Projected to occur in 2014, the E10 blend wall refers to the difficulty in incorporating ethanol into the fuel supply at volumes exceeding those achieved by the sale of nearly all gasoline as E10. Most gasoline sold in the US today is E10. In the final rule issued yesterday, the EPA said it will propose to use flexibilities in the Renewable Fuel Standard statute to reduce both the advanced biofuel and total renewable volumes in the forthcoming 2014 Renewable Fuel Standard volume requirement proposal. In January, a US federal court struck down the 2012 Renewable Fuel Standard target for refiner use of cellulosic biofuels, which stood at 8.65 million gallons, but upheld the government’s goal for use of other advanced fuels. The EPA says the final 2013 standard for cellulosic biofuel announced today was developed in a manner consistent with the approach outlined in that ruling. The American Petroleum Institute (API) had filed a lawsuit against the EPA over the cellulosic biofuel target. There was no commercial production of the fuel last year, BusinessWeek notes. Despite the lower cellulosic biofuel requirement and extended deadline, some oil industry groups aren’t happy with the EPA’s final ruling. API president and CEO Jack Gerard called the 2013 biofuel mandates a “missed opportunity to fix the problem” and called on Congress to “immediately repeal the broken mandate,” echoing earlier calls by API and the American Fuel and Petrochemical Manufacturers for a complete repeal of the Renewable Fuel Standard . The Biotechnology Industry Organization (BIO), on the other hand, applauded the ruling and said it provides advanced biofuel developers and investors with confidence that if they can produce advanced and cellulosic biofuels, they will have market access. Efforts to repeal the program are “motivated solely by the oil refining industry’s desire to block competition and consumer choice at the pump,” said Brent Erickson, executive vice president of BIO’s Industrial & Environmental Section. The Energy Independence and Security Act established the Renewable Fuel Standard program and the annual renewable fuel volume targets, which steadily increase to an overall level of 36 billion gallons in 2022. To achieve these volumes, the EPA calculates a percentage-based standard for the following year. Based on the standard, each refiner and importer determines the minimum volume of renewable fuel that it must ensure is used in its transportation fuel. Taylor Scott International