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RFA: ‘No Legal or Statutory Basis’ for EPA to Further Lower 2018 RFS Requirements

October 20, 2017


WASHINGTON - The Renewable Fuels Association (RFA) filed comments Thursday on EPA's recent Notice of Data Availability (NODA) that sought additional solicitation on whether the agency should further reduce the 2018 Renewable Fuel Standard (RFS) Renewable Volume Obligations (RVOs) below those proposed in July. In EPA's proposed 2018 RFS RVOs, the agency correctly chose to exercise only its cellulosic waiver authority to reduce the volumes of cellulosic biofuel, advanced biofuel and total renewable fuel volumes from their statutory levels, RFA noted in comments. "Therefore, we were surprised and disappointed when EPA released the Notice on Oct. 4, 2017, soliciting additional public comments on how EPA could use a general waiver, or other waiver authorities, to further reduce the 2018 RVOs below the levels proposed on July 21, 2017....We see absolutely no legal or statutory basis for EPA to exercise its general waiver authority in any of the ways contemplated in the notice to further reduce the 2018 RVOs," RFA wrote. Specifically, the NODA asked for comment on whether EPA should reinterpret "inadequate domestic supply" such that only domestically produced renewable fuels would be considered in determinations of available supply. However, "re-defining 'domestic supply' to exclude imports would presumably reduce the amount of renewable fuel available to obligated parties to meet the RFS, thereby justifying the use of a general waiver. Not only would such a re-interpretation defy common sense and the accepted meaning of 'supply,' but it would also run counter to both the statutory history of the RFS and the recent U.S. Court of Appeals decision affirming that imported biofuels are part of the domestic supply," RFA wrote. The only other statutory basis for granting a general waiver is that implementation of the required RFS volumes would result in severe economic or environmental harm to a state, region or the United States. "Far from harming the economy or environment, the RFS is providing substantial economic and environmental benefits to American consumers. It is absurd to suggest that the RFS and ethanol are somehow harming the economy when ethanol is priced below gasoline and remains the lowest-cost source of octane available on the market (on Oct. 19, 2017, nearby ethanol futures prices were trading at $0.25 per gallon, or 15 percent, below nearby gasoline blendstock futures)," RFA outlined to EPA. In the comments, RFA also weighed in on a number of other proposals, including one that would allow exported Renewable Identification Numbers (RINs) to count towards compliance with annual RFS requirements. "Obviously, exported gallons of renewable fuel, by definition, are not available 'to be consumed in the U.S.' Thus, allowing exports to count toward RFS compliance would completely undermine the intent of the RFS, artificially increase the supply of RINs, and create a disincentive to invest in the domestic renewable fuel technologies and infrastructure the RFS was designed to encourage," RFA noted. "The additional cuts to the 2018 RVOs suggested by the notice and the reported proposals to eliminate exporter RVOs both are clearly aimed at boosting RIN stocks, lowering RIN prices, and easing compliance for obligated parties," said RFA President and CEO Bob Dinneen. "However, the most straightforward method for growing RIN supplies is to further expand renewable fuel production and domestic consumption. Indeed, the fastest way for EPA to expand RIN supplies, lower compliance costs and grow the biofuels industry would be for EPA to allow year-round use of higher octane, lower cost fuels like E15," he noted. A full copy of RFA's comments is here.