NBB Rallies Industry for a Stronger, More Accountable RFS

The National Biodiesel Board recaps its efforts in pushing the administration and the U.S. EPA to grow the advanced biofuels and biomass-based diesel standards under the RFS while holding the agency more accountable for small refinery exemptions.
By The National Biodiesel Board | October 24, 2018

Congress designed the Renewable Fuel Standard program to reduce greenhouse gas emissions and expand the country’s renewable fuels sector, especially advanced biofuels such as biodiesel. The National Biodiesel Board is working tirelessly to promote a stronger RFS program and increase annual volumes to fully support the industry’s proven growth.

The Biodiesel Industry Can Do More
In June, NBB expressed appreciation that the U.S. EPA proposed increases in the 2020 biomass-based diesel and 2019 advanced biofuel categories under the RFS. While the proposed increases sent a positive signal to the industry, EPA’s granting of dozens of retroactive small refinery exemptions undercut prior year volumes and could still have a negative impact on future year standards.

“We welcome the administration’s proposal to grow the biodiesel volumes, following two flatlined years,” said Kurt Kovarik, vice president of federal affairs at NBB. “This is a positive signal for our industry and we’re pleased the EPA has acknowledged our ability to produce higher volumes. We’ve consistently demonstrated that we can do much more. The fact remains, though, instability in the RFS program caused by the EPA has done significant damage that can only be rectified for biodiesel through consistent and predictable growth in volumes.”

Kovarik pointed to decisions by the EPA administrator to provide numerous waivers to petroleum refiners that release them from their obligations under the RFS, effectively reducing the overall volumes under the program in 2016 and 2017. Those exemptions have effectively destroyed current demand for biodiesel by 300 million gallons.

“As a candidate on the campaign trail, Donald Trump pledged he would support biofuels and protect the RFS,” Kovarik added. “While this is just a proposal, we hope the administration is serious about growing biodiesel volumes and will fulfill the president’s promise to support and grow the RFS.”

The EPA proposed to raise the renewable volume obligations (RVO) for the biomass-based diesel category from 2.1 billion gallons in 2019 to 2.43 billion gallons in 2020. The agency also proposed to slightly increase the advanced biofuel category, for which biodiesel also qualifies, from 4.29 billion gallons in 2018 to 4.88 billion gallons in 2019.

The RFS requires the EPA to grow the volume of advanced biofuels like biodiesel delivered to U.S. consumers. Since taking office, Trump’s EPA has recommended zero growth for the biomass-based diesel category.

NBB Thanks Senators for RFS Support
This summer, 39 U.S. senators sent a letter to EPA Acting Administrator Andrew Wheeler urging him to increase biomass-based diesel and advanced volumes and accurately account for small refinery hardship exemptions in the annual RFS volumes. NBB specifically thanked Sens. Patty Murray, D-Washington; Roy Blunt, R-Missouri; Heidi Heitkamp, D-North Dakota; and Chuck Grassley, R-Iowa, for leading the letter.

Noting that EPA proposes to set the 2020 biomass-based diesel volume at 2.43 billion gallons, the senators wrote, “While these proposed increases are encouraging, these volumes continue to underestimate the existing potential of the biodiesel and renewable diesel industries in our states. We believe the biodiesel industry can do more and that EPA should demonstrate more confidence in the RFS program’s ability to drive growth.” Comments from the senators and NBB demonstrate that the increased biomass-based diesel volume is achievable with available feedstocks.

Calling on EPA to accurately account for small refinery hardship exemptions, the senators added, “It is critical that EPA appropriately account for any small refiner economic hardship exemptions that it reasonably expects to grant during the 2019 compliance year in the final rule, or EPA will not be able to fulfill its duty to ensure RVOs are met.”

Kovarik stated, “We join the senators in calling on EPA to raise biomass-based diesel volumes to an appropriate level that will drive additional growth. Biodiesel production has consistently exceeded the annual volume obligations set by EPA. The industry continues to operate below capacity, which limits job creation and economic growth. Moreover, EPA must fully and accurately account for small refiner hardship exemptions under the RFS. NBB estimates that the exemptions granted by EPA for 2016 and 2017 reduced demand for biodiesel and renewable diesel by about 300 million gallons. That lost demand is equal to or greater than the annual production of some of the nation’s top biodiesel-producing states, including Washington, Missouri, North Dakota and Iowa. The volumes that EPA sets are meaningless if the agency does not ensure they are met at the end of the year.”

Next Steps for RFS
NBB and its members continue working to move the needle for higher volumes, meeting with the administration, working with biodiesel champions on the Hill, and collaborating with key industry stakeholders. The EPA is set to finalize volumes before Nov. 30.

 
 
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