The Environmental Protection Agency (EPA) released today a proposed 2014 renewable fuel (RFS) standard that will require refiners to blend up to 15.21 billion gallons of biofuels into gasoline next year, which represents the first-ever reduction in a biofuels mandate that Congress created during the George W. Bush administration. The conventional fuel mandate (corn-based ethanol) would be 13.0 billion gallons rather than the originally required 14.4 billion gallons.
Friday’s action marked the first time EPA has lowered the overall ethanol-blending requirement from the prior year’s target. The move lowers the mandate from the 2013 required volume, 16.55 billion gallons, back to where it was in 2012. The agency is taking comments on a range of 15.00 to 15.52 billion gallons in its proposal. Congress sets the renewable fuels volume mandates, but EPA can administratively lower the requirement in certain situations.
“EPA’s announcement today is a good first and welcome step, but ultimately, Congress must act. Congressional action to repeal the RFS remains the most viable pathway to allowing all users of corn to have equal standing in the marketplace,” said NCC President Mike Brown.
“As corn comprises nearly 70 percent of the feed given to chickens, our single largest input cost, rising prices directly affect farmers and consumers bottom lines. Since the RFS was aggressively escalated in 2007, average annual feed costs have skyrocketed by $8.80 billion for poultry producers. Last year, the average U.S. family of four faced a $2,000 increase in food costs due to higher corn prices brought on largely by the RFS. We know all too well from last year that corn crop projections and inventories can be erased by Mother Nature’s wrath.”
EPA’s proposed 2014 renewable fuel standard rule relies on a legal provision that allows it to lower its advanced biofuels and total renewable fuel targets using two waiver authorities in the Clean Air Act, EPA said today. The first waiver authority allows the agency to lower the advanced biofuel volume mandate because of a shortage in available supply of cellulosic biofuels. The second waiver allows EPA to lower the overall renewable fuel requirements because of limits on the volume “of ethanol that can be consumed in gasoline given practical constraints on the supply of higher ethanol blends to the vehicles that can use them and other limits on ethanol blend levels in gasoline.”
Within the overall 2014 requirement, the agency is taking comments on mandating that the blending include advanced biofuels at a range of 2.00 billion to 2.51 billion gallons with the expectation of landing at 2.2 billion gallons. It also includes a range of 8.oo million to 30 million gallons for cellulosic biofuels, centered at 17 million gallons, and would set the volume for biomass-based diesel at 1.28 billion gallons.
This year’s adjustments are meant to keep the oil industry from hitting the “blend wall,” in which refiners may not be able to produce and market enough gasoline to accommodate that mandated quantity of ethanol. “The proposal seeks to put the RFS program on a steady path forward, ensuring the continued growth of renewable fuels while recognizing the practical limits on ethanol blending, EPA said in a regulatory announcement today.
The 2014 RFS is projected to account for about 9.37 percent of demand for gasoline in 2014. Ten percent of all fuel, including diesel, would be from renewable sources.
