The Renewable Fuel Standard (RFS) has been the single most successful clean fuels policy in the United States, making fuel more affordable for millions of Americans, helping to generate jobs, reviving rural America, reducing oil imports, and protecting our environment by reducing air pollution and greenhouse gas emissions. In fact, a 2019 study found that consumers save 22 cents on every gallon of gas thanks to the Renewable Fuel Standard (RFS). That’s a savings of nearly $5 every time you fill up, or $250 per American family every year.
More than a decade after the RFS2 was adopted, enormous progress has been made toward achieving the objectives of this landmark policy. It’s clear that renewable fuels like ethanol are a win for all Americans. It’s more affordable than traditional gasoline, it reduces America’s dependence on petroleum and harmful vehicle emissions, and the production of ethanol supports nearly 300,000 American jobs. The value of agricultural products and farm income has been buoyed. And, communities across the country have benefited from job creation, increased tax revenue, and heightened household income that stem from the construction and operation of a biorefinery.
From an environmental perspective, no other U.S. policy can hold a candle to the achievements of the Renewable Fuels Standard. An analysis from a renowned carbon accounting firm finds that between 2008 and 2020, the use of biofuels under the RFS has resulted in cumulative savings of 980 million metric tons of carbon dioxide-equivalent greenhouse gas emissions. The research indicates that the carbon intensity of corn-based ethanol used toward the RFS is now 45% below the carbon intensity of gasoline, having dropped 20% between 2008 and 2020.
Renewable fuels like ethanol have a forty-year track record of making fuel more affordable and vehicles more efficient for millions of Americans. To build on this record of success, the renewable fuels industry needs consistent policy in place for continued growth and innovation. Attempts by the oil industry to repeal or change the RFS would undermine the progress we have made. It’s critical the Environmental Protection Agency (EPA) follow the intent of Congress and meet the 15 billion gallon annual Renewable Volume Obligations set forth in the statute.
The RFS was created to preserve our environment, protect America’s energy independence, and give Americans more affordable options at the pump.
Big oil companies are working to undermine the RFS, which is hurting family farms, ethanol producers, and our environment. They are doing so by exploiting a loophole that exempts them from their renewable fuel obligations.
Here’s how it works.
Oil refineries producing transportation fuel must demonstrate each year that they have blended certain volumes of renewable fuel into gasoline or diesel fuel or acquired credits from others called “RINs” representing all or part of those volume obligations. The RFS allows certain “small” refineries – those with a throughput of less than 75,000 barrels per day – to petition the EPA for a temporary extension of an exemption from the renewable fuel volume requirements for a given year. To qualify for the exemption from the law, the refinery must show that compliance would impose a “disproportionate economic hardship” on them. The EPA is required to consult with the Department of Energy to determine whether to grant an exemption.
Previously, the EPA refused to provide the public with any information regarding how it assesses small refinery exemption petitions. The Biden Administration’s EPA, however, has agreed to provide some of this information to the Government Accountability Office.
The Renewable Fuels Association, and others, have petitioned the EPA to change its regulations to account for lost volumes of renewable fuel resulting from the unprecedented number of retroactive small refinery exemptions from RFS obligations granted by the EPA. We’ve asked the EPA to change existing regulations that determine the annual percentage of renewable fuels blended into America’s transportation fuel. American consumers and ethanol producers deserve a “true up” so that any small refinery exemptions granted after the renewable volume obligations (RVOs) for that year have been finalized are not lost.
A Renewable Identification Number (RIN) is a numbered credit assigned to each gallon of renewable fuel for the purpose of tracking its production and use under the RFS. Petroleum refiners and importers turn in RINs to the EPA to demonstrate that they fulfilled their annual renewable fuel blending obligations. Refiners and importers who do not wish to blend renewable fuels may instead purchase RINs from other parties who blended more than their obligated volume.
The system was designed so that as RFS volume requirements escalate, RIN supplies tighten, and RIN prices rise. This creates greater incentive to blend more renewable fuels, helping to lower vehicle emissions while making gas more affordable.
2023 marked the first year of a new chapter for the Renewable Fuel Standard (RFS). When the RFS was expanded in 2007, Congress included specific volume requirements through 2022, with 2023 being the first year where EPA had the discretion to “set” RFS volumes based on its analysis of several environmental, economic, and energy security factors.
After a multi-year advocacy effort by RFA and others, the RFS “set” rule was finalized by the EPA in June 2023, sending a strong signal to the marketplace and providing the longer-term certainty desired by affected parties. While the final RFS volumes may have been slightly lower than what biofuel producers had hoped for, the rule provided growth beyond 2022 levels in every category of renewable fuel, and—for the first time ever—provided three years’ worth of requirements all at once.
In addition, EPA took the public’s feedback to heart and decided against finalizing a flawed mechanism for allowing electric vehicle manufacturers to generate RFS credits (called “eRINs”) under the program. As RFA pointed out to EPA, its initial proposal for incorporating eRINs into the RFS was overly complex and inconsistent with the purpose of the RFS—which is to stimulate production and use of a wide range of clean fuels, not certain vehicle technologies.
Without a doubt, the RFS is the most successful federal clean fuels policy in history, and RFA’s advocacy efforts will continue to support the program’s role in lowering carbon emissions, providing more affordable fuels to consumers, and improving our nation’s energy security.
- Understanding the RFS and RINs (8/29/18)
- 2019 RVO Proposed Rule (6/18)
- Small Refiner Exemptions Economic Impact (6/18)
- What Happens to the RFS after 2022 (3/16)
- The Truth About RINS (6/21)
- The RFS and RINS (3/6/18)
- RFA Response to PES (2/20/18)
- Pennsylvania’s RFS Waiver Request (11/2/17)
- Celebrating Ten Years of the Renewable Fuel Standard (8/6/15)
- RFS Flexibility Provisions (3/27/13)
- Big Oil’s Self-Inflicted Blend Wall and Its Impact on RIN Pricing (3/7/13)
- EPA Proposed Rule for 2018 RVOs (7/21/17)
- EPA Final Rule for 2017 RVOs (5/31/16)
- The RFS: America’s Premier Energy Program (4/16)