The final regulatory actions taken today by the Environmental Protection Agency (EPA) bring order and certainty back to the Renewable Fuel Standard and provide a solid foundation for future growth in the production and use of low-carbon renewable fuels, according to the Renewable Fuels Association. The actions will also lead to lower gas prices for consumers and greater energy security, RFA said.
EPA today finalized a strong renewable volume obligation (RVO) for 2022, requiring the statutory volume of 15 billion gallons of conventional renewable fuel and 5.63 billion gallons of advanced biofuels. In accordance with a court order, the agency also finalized a supplemental requirement of 250 million gallons in 2022 to offset illegally waived volume from the 2016 RFS. In addition, EPA set the 2021 RVO for conventional renewable fuel at 13.79 billion gallons, based on the latest estimates of actual consumption. Finally, EPA finalized the denial of 69 pending small refinery exemption petitions, ensuring that all refiners are held accountable and equally obligated to blend lower-carbon, lower-cost biofuels.
“At long last, the RFS is being put back on track. Today’s actions by EPA and the Biden administration restore integrity and stability to the RFS program after several years of wanton mismanagement and abuse by the previous administration,” said RFA President and CEO Geoff Cooper. “The combination of a strong RVO for 2022, restoration of illegally waived volume from 2016, and a new direction for the SRE program puts the RFS program on solid footing for the future. We thank Administrator Regan and President Biden for honoring their commitments to implement the RFS in a way that is fair, transparent, and focused on growth.”
Cooper also noted that today’s package couldn’t have come at a more important time, as consumers are facing record-high gas prices driven by instability in global energy markets. “By requiring petroleum refiners to blend larger volumes of low-cost biofuels like ethanol, today’s actions will put downward pressure on gas prices and provide economic relief to American families facing record-high pump prices,” he said. “In the last few days alone, wholesale ethanol prices have been as much as $1.30 per gallon lower than gasoline, leading to significant savings at the pump for consumers of ethanol-blended fuels like E10, E15, and E85.”
The association today released an explainer documenting how ethanol reduces prices at the pump, due to its lower cost and the fact that it augments the overall fuel supply.
RFA also underscored the important role a robust RFS plays in enhancing energy security. “Ukraine is 5,000 miles away, but American consumers are feeling the economic impacts of war in Eastern Europe every time they pull up to the pump,” Cooper said. “This is a poignant reminder that the very purpose of the RFS is to increase domestic fuel production, diversify our fuel supply with lower-carbon alternatives, and reduce demand for petroleum imports. Just imagine how much higher gas prices would be without the addition of 15 billion gallons of low-cost ethanol to our fuel supply.”
The only blemish on EPA’s package of regulatory actions is the agency’s decision to reopen and retroactively lower RFS requirements for 2020, Cooper said. “While today’s package of actions collectively marks a major step forward for the RFS program, it isn’t perfect, and we remain disappointed by the approach EPA took on 2020. But we are committed to working with EPA and other stakeholders to continue moving the RFS program forward and growing the market for low-carbon renewable fuels like ethanol.”