The U.S. EPA on April 29 delivered its final rule to set 2021 and 2022 Renewable Fuel Standard renewable volume obligations (RVOs) to the White House Office of Management and Budget. The rule may also revise the existing 2020 RVO. OMB review marks a final step before the rulemaking is promulgated.

The EPA in December 2021 released a proposed rule that included proposed RVOs for 2021 and 2022. It also aimed to revise the already finalized 2020 RVO, an action that the U.S. biofuels has fiercely advocated against. A public comment period was open through Feb. 4.

In the rulemaking, the EPA proposed to reduce the 2020 RVO for renewable fuel to 17.13 billion gallons, down from 20.09 billion gallons as finalized in late 2019.  The nested RVO for advanced biofuel would be set at 4.63 billion gallons, down from 5.09 billion. The RVO for biomass-based diesel would be maintained at 2.43 billion gallons, while the cellulosic biofuel RVO would be set at 510 million gallons, down from 590 million gallons. The agency said it was proposing to revise 2020 RVOs to account for challenges the program and the market faced during the year, including from the COVID-19 pandemic.

For 2021, the EPA proposed set the RVO for total renewable fuel at 18.52 billion gallons, including 5.2 billion gallons of advanced biofuel, 2.43 billion gallons of biomass-based diesel, and 620 million gallons of cellulosic biofuel. The EPA said the 2021 RVOs are being proposed at the level the agency projects the market used during the 2021 calendar year.

For 2022, the EPA proposed to set the RVO for total renewable fuel at 20.77 billion gallons, including 5.77 billion gallons of advanced biofuel, 2.76 billion gallons of biomass-based diesel, and 770 million gallons of cellulosic biofuel. The agency also proposed to add a 250-million-gallon supplemental obligation and has stated its intent to add another 250-million-gallon supplemental obligation in 2023. The supplemental obligations would address the remand of the 2014-2016 annual rule by the D.C. Court of Appeals in Americans for Clean Energy v. EPA. The agency said spreading the obligation over two years would provide the market time to respond to the supplemental obligation.

The RVO rule also includes a variety of other provisions, including language to allow for the production, transfer and use of biointermediates to generate qualifying fuel under the RFS program. In addition the proposal includes provisions to change the biomass-based diesel weighting factor from 1.50 to 1.55, changes to registration for baseline volumes, changes to attest engagements for parties owning renewable identification numbers (RINs), the treatment of confidential business information, clarifying the definition of agricultural digesters and several other changes and minor corrections.

With the final rule now under OMB review, it appears that the EPA is on track to finalize the RVO rulemaking by June 3 in compliance with a consent decree approved by the U.S. District Court for the District of Columbia on April 22. That consent decree is related to a legal challenge filed by Growth Energy on Feb. 8 seeking an injunction requiring the EPA to promptly promulgate RVOs for 2021 and 2022. Growth Energy pursued the legal challenge after multiple notices of intent to sue the agency over delays in setting RFS RVOs.