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EPA promises reductions to biofuel mandates but not until next year

October 28, 2013

In August, the Obama administration instructed US refiners to blend 16.55bn gallons of renewable fuels into the nation’s gasoline supply this year, while paring a specialised ethanol requirement that the oil industry had criticised as too ambitious, Soyatech reports.

In August, the Obama administration instructed US refiners to blend 16.55bn gallons of renewable fuels into the nation’s gasoline supply this year, while paring a specialised ethanol requirement that the oil industry had criticised as too ambitious, Soyatech reports. The Environmental Protection Agency (EPA)’s approach seemed designed to quell market fears surrounding the eight-year-old law that mandates a steadily increasing use of corn-based ethanol, biodiesel, advanced biofuels and cellulosic supplies made from non-edible plant parts.

Lawmakers are preparing for a major rewrite of the statute, as refiners warn they are hitting a ‘blend wall’ where they can no longer mix in enough ethanol to meet the mandate’s volume targets without exceeding the 10% threshold acceptable for use in all cars and trucks. The EPA told refiners that renewable fuels should make up 9.74% of the nation’s fuel supply – including 1.28bn gallons of biodiesel and 2.75bn gallons of advanced biofuels, the same quotes the agency first proposed for these fuels in February.

However, the EPA slashed its initial cellulosic biofuel requirement by more than half, from 14M gallons to six million. Although cellulosic production facilities are now coming online, such fuel generally has not been commercially available in the USA. The oil industry has gone to court to battle the cellulosic requirement it derides as mandating a ‘phantom fuel’. The EPA has also promised to make other reductions when it proposes 2014 targets later this year. Specifically, the agency said it would pare both the advanced biofuel and corn-based ethanol volume targets.

“We expect that, in preparing the 2014 proposed rule, we will estimate the available supply of cellulosic and advanced biofuel, assess the blend wall and current infrastructure and market-based limitations to the consumption of ethanol in gasoline-ethanol blends above [10%], and then propose to establish volume requirements that are reasonably attainable in light of these considerations and others, as appropriate,” the EPA said.
The agency also said it would extend the deadline to comply with the 2013 quotas by four months – to 30 June, 2014 – in response to industry concerns on the announcement of final requirements eight months into the year.
Nevertheless, petroleum industry critics are dissatisfied. American Petroleum Institute president Jack Gerard said the EPA should have made major changes to the programme this year.
Renewable fuel advocates have argued that if Congress dismantles the renewable fuel standard or the EPA dramatically reduces required volumes, it could jeopardise planned new biofuels production facilities and costly research into promising new technologies.

  • The USā€ˆFederal Trade Commission (FTC) will examine allegations that petroleum companies may be undermining efforts to distribute renewable fuels, Bloomberg reported in August. Edith Ramirez, commission chairwoman, said the FTC would ‘evaluate’ concerns that oil companies are blocking the distribution of renewable fuels by requiring retailers to carry premium gasoline.

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