Draft Proposal Concerns Industry

Near press time, we obtained an early  draft of U.S. EPA’s renewable fuel standard (RFS) volume proposal for 2014, and its contents are both disturbing and baffling to biodiesel stakeholders. According to the document, the agency proposes stalling the biomass-based diesel renewable volume obligation (RVO) at 1.28 billion gallons for 2014 and 2015, while lowering the 2014 volumes for ethanol and cellulosic biofuel well below statutory requirements. For advanced biofuels, however, the agency proposes not only reducing the category’s 2014 statutory volume of 3.75 billion ethanol-equivalent gallons, but also pushing it far below this year’s achievable volume of 2.75 billion ethanol-equivalent gallons, to just 2.21 billion gallons.

The early draft proposal, which may be different than the proposal EPA will eventually publish, lists total renewable fuel at 15.21 billion gallons for next year, while the statutory requirement is 18.15 billion gallons. The proposal seeks a 2014 ethanol RVO at 13 billion gallons, down from next year’s requirement of 14.4 billion gallons. Cellulosic biofuel RVO is proposed at a mere 23 million ethanol-equivalent gallons.

The National Biodiesel Board projects U.S. biodiesel producers will manufacture up to 1.7 billion gallons this year, blowing past the 1.28 billion gallon 2013 RVO and equating to 2.55 billion ethanol-equivalent gallons under the advanced biofuel category. Anne Steckel, vice president of federal affairs for NBB, says the numbers in the draft proposal don’t reflect current actual market production for advanced biofuels. The agency says its proposal is based on biodiesel production, consumption, infrastructure, climate change, energy security, the agricultural sector, air quality, and others, but if so, a reasonable observer would expect an entirely different outcome given this year’s production and consumption rates, and biodiesel’s positive impacts on the environment, energy security and agriculture.

When the official proposal is published, it is clear that biodiesel stakeholders must make their voices heard in the comment period, providing solid argument to EPA that its proposal to stall the biodiesel RVO, and significantly lower the advanced RVO, is fundamentally flawed and detrimental to the existing commercial advanced biofuel industry of which biodiesel is the clear leader.