EPA proposes cutting biofuels mandate for 2018

"Never in its history has the EPA reduced the amount of advanced biofuels required to be used in the USA under the Renewable Fuel Standard".

The ethanol industry and corn farmers are pleased, but biodiesel producers and soybean growers are not so much with new proposed levels for biofuels under the Renewable Fuel Standard (RFS) released by the Environmental Protection Agency. "Never in its history has the EPA reduced the amount of advanced biofuels required to be used in the US under the Renewable Fuel Standard (RFS)".

On Wednesday, the EPA released its proposed rule to set 2018 renewable volume standards (RVOs) under the RFS, along with the 2019 RVO for biomass-based diesel.

The agency also noted the proposed biomass-based diesel volume exceeds the statutory minimum "and the proposed volumes of total renewable fuel, advanced biofuel, and cellulosic biofuel would achieve the implied statutory volumes for conventional biofuel and non-cellulosic advanced biofuel".

"We are concerned that by reducing the cellulosic (requirement), this proposal may weaken the signal to the marketplace", said Bob Dinneen, head of the Renewable Fuels Association.

But it proposed actually cutting the amount of advanced biofuels for 2018 to 4.24 billion gallons, down from 4.28 billion this year. The Congressional Budget Office found that consumer gas prices could rise by up to 26 cents per gallon unless EPA lowers RFS mandates. But, he said, his administration would save it.

The announcement comes as the biofuels industry lobbies for changes in federal law that would allow the sale of E15, a fuel with a higher concentration of ethanol than is commonly sold in the United States.

That leaves the effective mandate for ethanol at 15 billion gallons - the same as 2017.

The American Petroleum Institute applauded the EPA's announcement but said it didn't go far enough. If you want cleaner air, a stronger farm economy and vibrant rural communities, and greater energy independence, stand up for the Renewable Fuel Standard. We need to reform outdated energy policies to reflect the energy realities of today and tomorrow.

The Biotechnology Innovation Organization called for the RVOs to be improved in order to support investment and capacity building for advanced and cellulosic biofuels. They both said they would continue to work to promote the industry.

The Trump administration is holding off any major shift to US ethanol policy for the moment, announcing Wednesday it planned to maintain the mandate for ethanol and other biofuels near current levels in 2018.

The EPA's proposed cuts to advanced and cellulosic biofuels "will have a chilling effect on the push toward next generation biofuels", said Iowa Senator Chuck Grassley. "BIO and its members look forward to working with EPA to identify and account for all qualifying volumes of advanced biofuel".

"Today's proposal shows that EPA understands the RFS shortfalls, and that it's determined to implement a workable and equitable program with the tools at its disposal". A prepublication version of the rule can be downloaded from the EPA website.