The Trump administration handed ethanol producers a modest win Wednesday by allowing the nation’s renewable fuel mandate to be met primarily by blending conventional biofuels into the nation’s gasoline supply.
The Environmental Protection Agency, which must publish the Renewable Fuel Standard blending requirements annually, will keep the standard the same in 2018 as it did for the 2017 requirement of 15 billion gallons of conventional biofuels met primarily by using corn ethanol.
The Renewable Fuel Standard requires refiners to blend higher percentages of a variety of biofuels into the nation’s gasoline and diesel supplies through 2022. Although the standard requires different forms of biofuels to be blended, most renewable fuels in the nation’s fuel supply currently come from corn ethanol.
The new annual blending targets reduced the requirements for blending advanced biofuels from 4.28 billion gallons in 2017 to 4.24 billion gallons in 2018. The biodiesel standard was also kept flat at the current 2.1 billion gallon target. The EPA also cut the level of cellulosic biofuel, considered the next generation of ethanol, from 311 million gallons to 238 million gallons. Cellulosic biofuels are supposed to help reach most of the standard’s remaining 36 billion gallon goal by 2022. The fuels are derived from crop waste and not corn.
“This proposal continues to underestimate the ability of the biomass-based diesel industry to meet the volumes of the RFS program,” said Anne Steckel, vice president of federal affairs for the National Biodiesel Board. “This is a missed opportunity for biodiesel, which reduces costs, provides economic benefits and results in lower prices at the pump. Higher advanced-biofuel and biomass-based diesel volumes will support additional jobs and investment in both rural economies and clean-energy-conscious communities.”
Steckel noted that the EPA announcement is only a proposal, and “in the past, the EPA’s final numbers have been higher than those in the proposal.” She said her group “will continue to work with the EPA and ensure the administration doesn’t turn its back on our domestic energy producers.”
The Iowa Renewable Fuels Association said the proposal keeps President Trump’s campaign promise to the ethanol industry by maintaining the 15 billion gallon target for ethanol. Iowa is the largest producer of the alcohol-based fuel in the country. “Unfortunately, a change in administrations did not change the EPA’s underappreciation for the potential of U.S. biodiesel production,” the trade group said.
“Keeping biodiesel levels frozen at 2.1 billion falls short of U.S. industry capabilities, even before imports are considered,” the group said.
The ethanol industry and biofuel proponents have been expecting the new 2018 standard to be issued in early July, which would give the EPA enough time to collect comments and finalize next year’s obligations by the Nov. 30 deadline set by Congress.
Renewable fuel proponents say EPA Administrator Scott Pruitt has vowed to keep the program on schedule and to meet its deadlines.
President Trump said the ethanol industry is “under siege” in giving a speech in Cedar Rapids, Iowa, last month, vowing to save the industry. Setting the requirement at 15 billion gallons may assist the ethanol industry, but it will stoke opposition from the refinery industry, which wants a much lower standard.
The oil industry has argued that setting the standard at 15 billion gallons would topple the “blend wall,” which is the limit at which ethanol can blend into the gasoline supply using 10-percent fuel blends, or E10.
Blending more ethanol into the gasoline supply using 15-percent ethanol blends to meet the goals of the RFS could damage vehicle engines, the refiners argue. They argue that most vehicles on the road cannot handle ethanol blends above E10 and do not have engine warranties that cover any damage that does occur.
The ethanol industry refutes these challenges, arguing that the blend wall is an argument perpetuated to block competition. Biofuel proponents say there has been no evidence that surpassing the blend wall has led to engine damage or any other negative consequences for consumers.
The American Petroleum Institute has been urging the EPA to approve a standard that would ensure corn ethanol comprises less than 10 percent of the market at 9.7 percent to keep from surpassing the blend wall.
