EPA today finalized increases in renewable fuel volume requirements across all categories of biofuels under the Renewable Fuel Standard (RFS) program. In a required annual rulemaking, today’s action finalizes the volume requirements and associated percentage standards for cellulosic biofuel, advanced biofuel, and total renewable fuel for 2017, and for biomass-based diesel for 2018.

EPA today finalized increases in renewable fuel volume requirements across all categories of biofuels under the Renewable Fuel Standard (RFS) program. (photosoup/Thinkstock)

“Renewable fuel volumes continue to increase across the board compared to 2016 levels,” said Janet McCabe, the agency’s acting assistant administrator for the Office of Air and Radiation. “These final standards will boost production, providing for ambitious yet achievable growth of biofuels in the transportation sector. By implementing the program enacted by Congress, we are expanding the nation’s renewable fuels sector while reducing our reliance on imported oil.”

Source: EPA

Key elements of today’s action:

-Non-advanced or “conventional” renewable fuel increases in 2017, meeting the 15 billion-gallon congressional target for conventional fuels. There is no "conventional" biofuel standard specified by EPA regulations, rather the agency calculates the total amount of conventional biofuels by subtracting the amount of total advanced biofuels from the total biofuel standard.

-The standard for biomass-based biodiesel – which must achieve at least 50% lifecycle greenhouse gas emission reductions compared to petroleum-based diesel – grows by 100 million gallons. The required volume of biomass-based diesel for 2017 is twice that of the minimum congressional target.

-Cellulosic biofuel – which must achieve at least 60% lifecycle greenhouse gas emissions reductions – grows 35% over the 2016 standard.

-The advanced biofuel standard – comprised of biomass-based diesel, cellulosic biofuel, and other biofuel that achieves at least 50% lifecycle greenhouse gas emissions reductions – increases 19% over the 2016 standard. The cellulosic and biomass based diesel requirements are added to other advanced biofuel volumes to arrive at the total advanced biofuels volume, according to EPA.

-Total renewable fuel volumes grow 1.2 billion gallons from 2016 to 2017, a 6% increase.

Source: EPA

"Today’s announcement by the EPA doesn’t really change the market," said Farm Futures senior grain market analyst Bryce Knorr. "The new target reflects what is happening currently with ethanol usage. Assuming fuel prices stay relatively cheap, increased driving will lead to more ethanol demand, but not explosive growth like we saw previously. The mandate will only come into play if supplies of corn are cut sharply, say, by weather problems. Then it will force rationing by other end users, cutting corn feed usage and exports."

"We're happy to give credit to EPA for setting the RVO blend number at the 15-billion-gallon mark," said Illinois Corn Growers Association president Justin Durdan, a farmer from Utica, Illinois. "That's consistent with what the industry is producing and also meets the statutory expectation set forth by Congress in the RFS. That said, it's a volume number that by law should have been adhered to from 2015 forward. We look forward to continuing our work with EPA on addressing other market barriers for corn-based ethanol."

“Moving forward, we call on the EPA to continue following the law and keep the RFS on track," said Texas farmer Wesley Spurlock, National Corn Growers Association president. "Doing so will bring much-needed stability to the marketplace, providing greater certainty for farmers and the industry while also spurring increased investment in renewable fuels."

"EPA will raise the overall volumes relative to the Proposed Rule and increase the total Advanced Biofuels volume requirements for 2017 from 4.0 billion gallons to 4.28, an increase of 19%," said ASA president Richard Wilkins, a soybean farmer from Greenwood, Delaware. "When EPA issued its proposed rule, ASA clearly stated that the 2.1 billion gallon mark did not adequately capture the capacity of the biodiesel industry," he said, however EPA chose not to raise the Biomass-based diesel requirements for 2018. "To see the volume remain at 2.1 billion gallons as they were in the Proposed Rule is frustrating. We know we can do more."

On May 18, 2016, EPA proposed the volume requirements and associated percentage standards that would apply under the RFS program in 2017 for cellulosic biofuel, advanced biofuel, and total renewable fuel. EPA also proposed the volume requirement for biomass-based diesel for 2018.

The Clean Air Act requires EPA to set annual RFS volume requirements for four categories of biofuels. EPA is using the tools provided by Congress to adjust the standards below the statutory targets, but the steadily increasing volumes in the final rule continue to support Congress’s intent to grow the volumes. EPA implements the RFS program in consultation with the U.S. Department of Agriculture and the U.S. Department of Energy.

Sources: EPA, NCGA, ASA, Illinois Corn Growers Association