company logo

EPA fans flames with latest standard for cellulosic biofuels

March 21, 2013

The US Environmental Protection Agency (EPA) published its renewable fuel standards for 2013 at the end of January.

The US Environmental Protection Agency (EPA) published its renewable fuel standards for 2013 at the end of January. The standards call for a total of 16.55bn gallons of renewable fuel to be produced and blended into transport fuels in 2013, some 1.35bn gallons above the figure mandated for 2012.

The standards will be open for a 45-day period of public consultation before being finalised, under the terms of the RFS2 programme, set up under the Energy Independence and Security Act of 2007. RFS2 requires that the annual renewable fuel volume targets are increased steadily to the target level of 36bn gallons by 2020. However, there is great concern over the standard set for so-called cellulosic biofuels, made from woody materials, grasses and similar biomass. For 2013, this is set at 14M gallons, up from a requirement of 8.7M in 2012, when actual production was close to zero.

A spokeswoman for the EPA has said the proposed standards are a “reasonable representation of expected production” of biofuels this year.
However, the EPA is seen by some as being overly optimistic. The American Petroleum Institute (API) recently challenged the EPA in court for its ‘unrealistic’ cellulosic fuels standard for 2012 (see previous OFIs).

On 25 January, a three-judge panel at the US Court of Appeals for the District of Columbia upheld the challenge, saying that the EPA standard was based on wishful thinking rather than realistic estimates of what could be achieved.
Bob Greco, a director of API, whose members are bound by the quotas set by the EPA, said the EPA “make rosy estimates because there’s no skin off their back if they fail”.
The three judges noted that while they understood the intention of the RFS2 standards to force an industry to develop new technology to meet environmental goals, they said that in this case, the regulated industry was not the producer but a captive consumer in no position to influence the growth in cellulosic fuel production.

The EPA volumes and standards set for other renewable fuels are 1.28bn gallons for biomass-based diesel and 2.75M gallons for advanced biofuels. Also at the end of January, the EPA published a proposed rule creating a structured process for the buying and selling of biofuel credits known as renewable identification numbers (RINs) to verify their validity. Companies use RINs to prove compliance with the federal blending mandate.

The proposed rule has six major provisions, and its announcement follows a lawsuit filed by Cargill in New York last year, in which it claimed it had been fraudulently sold 12M RINs by a New York trader in 2010, purportedly issued by a Texas producer. At the time, the EPA said that trading in RINs was an unregulated “buyer beware” market, in which several other companies had been scam victims.


Related News