EPA Issues Supplemental Proposal for Renewable Fuels Volumes

The U.S. Environmental Protection Agency (EPA) issued a supplemental notice of proposed rulemaking on October 15 seeking additional comment on the recently proposed rule to establish the cellulosic biofuel, advanced biofuel and total renewable fuel volumes for 2020 and the biomass-based diesel volume for 2021 under the Renewable Fuel Standard (RFS) program.

The latest notice does not change the proposed volumes for 2020 and 2021. Instead, it proposes and seeks comment on adjustments to the way that annual renewable fuel percentages are calculated. Annual renewable fuel percentage standards are used to calculate the number of gallons each obligated party is required to blend into their fuel or to otherwise obtain renewable identification numbers to demonstrate compliance.

Specifically, the agency is seeking comment on projecting the volume of gasoline and diesel that will be exempt in 2020 due to small refinery exemptions based on a three-year average of the relief recommended by the Department of Energy (DOE), including where DOE had recommended partial exemptions. The agency intends to grant partial exemptions in appropriate circumstances when adjudicating 2020 exemption petitions. The agency proposes to use this value to adjust the way renewable fuel percentages are calculated. The proposed adjustments would help ensure that the industry blends the final volumes of renewable fuel into the nation’s fuel supply and that, in practice, the required volumes are not effectively reduced by future hardship exemptions for small refineries.

The supplemental notice seeks to balance the goal of the RFS of maximizing the use of renewables while following the law and sound process to provide relief to small refineries that demonstrate the need.

EPA will hold a public hearing on October 30, followed by a 30-day comment period from the date of the hearing to receive public input on these issues. The agency will finalize this action later this year.