EPA's Proposed Renewable Fuel Standards for 2019

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On July 10, 2018, the Environmental Protection Agency (“EPA”) released its proposed rule for renewable fuel volume requirements for 2019 under the Renewable Fuel Standard (“RFS”) program. Although the proposed total requirement for 2019 is 590 million gallons more than the requirement for 2018, it is much less than the expected statutory amounts when the program was enacted. Relying on its cellulosic waiver authority, EPA is proposing to reduce the statutory total renewable fuel requirement by 8.12 billion gallons. If the proposed requirement becomes final, EPA would have the opportunity to modify the statutory amounts in subsequent years under the statutory “reset” authority. The agency is also soliciting comments on ways to minimize potential manipulation of the RIN market for future rulemaking. The comment period is open through August 17, 2018 and a public hearing will be held on July 18, 2018.

BACKGROUND -

Enacted in 2006 to promote the integration of renewable fuels and energy independence, the RFS program requires the incorporation of renewable fuels into gasoline sold or introduced into commerce in the United States on an annual basis according to a schedule of increasing volumes beginning in 2006 and ending in 2022, with rulemaking to determine amounts in later years. The two categories of renewable fuels required by the RFS program are conventional biofuel (e.g., cornstarch ethanol) and advanced biofuel (e.g., ethanol derived from biomass other than cornstarch). Together, they make up the total renewable fuel requirement. Advanced biofuel is further delineated into cellulosic biofuel and biomass-based diesel—each with its own target volumes. These requirements are “nested” within each of the categories and, as a result, the advanced biofuels can be used to meet the requirements for multiple RFS categories. Each year EPA implements these requirements through annual rulemaking to either adopt the statutory amounts or assign lesser amounts under certain waiver provisions.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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