EPA announces proposed expansion of Renewable Fuel Standard

On December 2, 2022, in RFS, by David Elrod

The Environmental Protection Agency (EPA) this week announced a proposal for “steady growth” in the mandate that biofuels are blended into the national fuel supply for 2023 through 2025.

EPA is required by a recent court ruling to finalize a rule setting 2023 Renewable Volume Obligations (RVOs), which are the levels of alternative fuels that are required to be blended into the U.S. fuel supply annually.

The announcement listed 2023 volumes at 20.82 billion gallons of alternative fuels across corn ethanol, cellulosic and advanced biofuels, and biodiesel. That number is up slightly from 2022 obligations, which were 20.63 billion gallons across all categories. The 20.82 billion gallons for 2023 includes 5.82 billion gallons of advanced fuels and 15 billion gallons of conventional corn ethanol. EPA also included a supplemental 250 million gallons of conventional corn ethanol for 2023 only.

EPA also announced 2024 volumes at 21.87 billion gallons overall and 2025 volumes at 22.68 billion gallons overall. These continue to include 15 billion gallons of conventional corn ethanol, continuing the levels from recent years.

2023 marks the first year the statutory provisions governing the RFS program require EPA to modify, or “reset,” blending obligations if blending targets in recent years haven’t been met. While obligations for corn ethanol have been met in each year of the RFS, obligations for advanced fuels have not, forcing the EPA to conduct this rulemaking.

“When setting biofuel volumes for years after 2022, EPA must consider a variety of factors specified in the [Energy Independence and Security Act of 2007], including costs, air quality, climate change, implementation of the program to date, energy security, infrastructure issues, commodity prices, and water quality and supply,” EPA said in a press release. “The agency is seeking comment on the proposed volumes and how to appropriately balance these factors so that the program works for renewable fuel growers and producers, refiners and the union workers who operate these facilities, and fuel consumers.”

EPA did not mention commodity end-users in its list of affected stakeholders.

EPA this year has made a few other moves to impact the levels of corn ethanol blended into the fuel supply. In conjunction with 2022 final RVOs, EPA in April denied dozens of Small Refinery Exemptions, which would have lowered the required blending levels under the RFS. EPA also in April 2022 allowed summer sales of E15 under an emergency waiver authority.

EPA in September 2022 indicated it intends to conduct rulemaking to allow for year-round sales of E15 in 2023.