While the goal of the RFS has always been to increase the use of renewable fuels and reduce greenhouse gas (GHG) emissions in the U.S., the program has reached a new phase whereby Congress provided EPA with much more authority over future volume determinations. Recently the Agency closed a comment period on their so-called “Set” proposal for what the RFS will look like for 2023 through 2025.
As with most EPA RFS rulemakings, we support some provisions and strongly oppose others. Here is a summary of the comments ACE submitted to EPA.
What we like about EPA’s RFS proposal:
- Setting an “effective” conventional biofuel requirement of 15.25 billion gallons for 2023 through 2025;
- Restoring the final 250-million-gallon remedy as a supplemental requirement for 2023;
- The multi-year nature of the Set rule because it provides market participants certainty to plan for the future;
- No Small Refinery Exemptions (SREs) for 2023 through 2025; and
- EPA updating its antiquated GHG model assumptions and methodology in the future.
What we don’t like:
- EPA suggesting it may retroactively waive blending levels, proposing an “alternative approach” to reduce conventional biofuel blending for 2024 and 2025, and expressing doubt about the ability for higher blends of corn-starch ethanol to fulfill the implied conventional biofuel targets of the RFS; and
- EPA breaking precedent by giving Tesla and other vehicle manufacturers the ability to generate eRINs when all other RINs are generated by the producer of the renewable fuel.
What ACE encouraged EPA to do in the final rule, expected to be issued in mid-June:
- Finalize 15.25 billion gallons minimum for conventional biofuel blending;
- Ensure any increase to advanced volumes be accompanied by a corresponding increase in total renewable fuel so refiners must use higher blends of ethanol instead of paper RINs;
- Adopt GREET for its lifecycle modeling, consistent with what Congress required of Treasury in the Inflation Reduction Act 45Z clean fuel production tax credit;
- Require stronger traceability and verification standards to avoid fraud and abuse of eRINs;
- Prioritize approving corn kernel fiber pathway registrations in 2023; and
- Take swift action on a plan by several governors to enable year-round access to E15 in their states.
ACE is ready and willing to help the Administration take immediate and significant steps to reduce GHG emissions from transportation fuels through increased use of ethanol, however we need improvements in the final RFS Set rule to unleash ethanol’s low carbon potential.
