Biofuels Bulletin
By Ron Kotrba, Biobased Diesel Daily
Although Democrats’ and some biofuel stakeholders’
A Lump of Coal and Diamond in the Rough
hopes to pass the incentive-rich Build Back Better
Act before Christmas were dashed, the biofuels
industries did receive an early holiday gift from the
U.S. Environmental Protection Agency. Whether this present was
a lump of coal or a diamond in the rough — or both — depends
on who is asked.
The agency released its long-awaited proposed renewable
volume obligations (RVOs) for 2021 and 2022 total renewable
fuel, and advanced and cellulosic biofuels, in addition to
the proposed 2022 RVO for biomass-based diesel under the
Renewable Fuel Standard. EPA also proposed lowering 2020
RVOs previously set for total, advanced and cellulosic biofuel.
For 2021 and 2022, EPA proposed setting total renewable
fuel volumes at 18.52 billion and 20.77 billion gallons,
respectively; advanced biofuels at 5.2 billion and 5.77 billion
ethanol-equivalent gallons; and cellulosic biofuel at 0.62 billion
and 0.77 billion gallons. The agency proposed increasing the
2022 biomass-based diesel RVO from 2.43 billion gallons in
2021, set two years ago, to 2.76 billion gallons — an increase
of 330 million gallons, or nearly 14%.
In a move that adversely affects ethanol stakeholders the
most, EPA offers to lower the total, advanced and cellulosic
biofuel RVOs previously set for 2020. The agency presented
its tentative plan to lower total biofuel volumes in 2020 by
nearly 3 billion gallons, from 20.09 billion to 17.13 billion
gallons. It is also proposing to reduce the previously set 2020
advanced biofuel RVO from 5.09 billion to 4.63 billion ethanol-equivalent
gallons.
Those opposed to the measure argue this could set a
dangerous precedent of walking back RVOs well after they are
finalized. No retroactive ratcheting back biomass-based diesel
RVOs, which are statutorily supposed to be set more than a year
in advance, were proposed. EPA provided no guidance on 2023
biomass-based diesel volumes, which were due Nov. 30.
The agency is also signaling denial of
more than 60 pending small refinery
exemptions (SREs), which had significantly
impaired biofuel demand under the
Trump administration.
The last time EPA issued RFS final-rule volumes was
December 2019 when then-President Donald Trump’s EPA kept
the 2021 biobased diesel volumes at 2.43 billion gallons, the
same as in 2020. In that final rule, EPA slightly increased the
2020 advanced biofuel volume from its proposed 5.04 billion
ethanol-equivalent gallons to 5.09 billion.
EPA is also proposing to address the remand of the 2014-
2016 annual rule by the D.C. Circuit Court of Appeals in the
Americans for Clean Energy case. The agency is offering the idea
of a supplemental volume of 250 million gallons in 2022 with
expressed intention to propose the same additional volume for
2023 in a subsequent action plan.
The agency is also signaling denial of more than 60 pending
small refinery exemptions (SREs), which had significantly
impaired biofuel demand under the Trump administration. The
suite of proposals includes several other tentative measures,
such as a revival of the five-year-old Renewable Enhancement
and Growth Support rule and more. Public comment on the
proposed RFS rule is open through Feb. 4.
U.S. Department of Agriculture Secretary Tom Vilsack
announced USDA would make up to $800 million available to
support biofuel producers and infrastructure. The economic
relief includes $700 million in direct payments to biofuel
producers who suffered market losses during the pandemic with
monies available through the new Biofuel Producer Program
authorized by the CARES Act.
Continued on page 20
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