EPA Proposes Raising Biofuel Quotas in Fossil Fuels, Electric Vehicles

Corn growers, renewable fuel trade groups applaud update to Renewable Fuel Standard quotas as Big Oil groups ask administration to lift biofuel restrictions.
December 2, 2022

The Biden administration is proposing raising the quotas for biofuels mixed into traditional transportation fuels for the next three years, including new regulations on the fuel used to produce electricity to power electric vehicles.

The trade organizations for biofuel manufacturers and the farmers who grow the crops used to produce some biofuels support the proposal, saying it will help reduce carbon emissions and enhance the nation’s energy security, while fuel manufacturers called it a “missed opportunity.”

The proposal sets the volume targets for the amount of biofuel, like ethanol and biodiesel, that has to be added to gasoline, diesel and other transportation fuels over the next three years. The U.S. Environmental Protection Agency has the power to set those targets under the Renewable Fuel Standard program authorized by Congress in 2005.

Fuel manufacturers can either mix in biofuel to the fuels they produce or purchase equivalent credits that represent the required fuel volume.

The proposal would triple the percentage standards of ethanol required in fuel within the next three years from 0.41% to 1.23%, a boon for corn growers in Indiana and other Midwestern states.

According to the Indiana Corn Marketing Council, ethanol plants consume nearly 47% of Indiana’s total corn crop, making the state the fifth-largest producer of ethanol in the U.S.

The proposal would also benefit states that produce even more corn and ethanol than Indiana, such as Iowa, Illinois and Nebraska.

“EPA clearly recognizes that renewable fuels like ethanol play a critical role in cutting greenhouse gas emissions, increasing U.S. energy independence and providing long-term relief to consumers at the pump,” National Corn Growers Association president Tom Haag said in a press release. “With continued pressure on energy security and costs and the need to accelerate carbon emission reductions, biofuels can contribute even more, and we will make that case to EPA for the final volumes.”

The Renewable Fuels Association said the 45.5 billion gallons of ethanol and other conventional renewable fuels over the next three years would help reduce greenhouse gas emissions.

“Once finalized, this rule will significantly accelerate growth and investment in the low-carbon renewable fuels that will help decarbonize our nation’s transportation sector, extend domestic fuel supplies and bolster the rural economy. By including three years’ worth of RFS volumes, EPA’s proposed rule will finally provide certainty and stability for the entire supply chain,” said RFA president and CEO Geoff Cooper.

The proposal will also regulate some renewable electricity made from renewable biomass used for transportation fuel in electric vehicles. The agency said it will wait to receive public comments before setting that standard.

The American Fuel and Petrochemical Manufacturers called the proposal a “missed opportunity” to modernize the Renewable Fuel Standard.

“It doubles down on some of the program’s most problematic elements without taking meaningful steps to address fundamental RFS design flaws or derive better carbon benefits from the program,” wrote Geoff Moody, AAFPM senior vice president of government relations and policy, in a press release. “For the final rule, EPA must go back and set conventional volumes that are aligned with consumer demand and infrastructure realities. It must also hold true to the legacy of RFS as a liquid fuels programs — not an electric vehicle program — by rejecting yet another massive regulatory subsidy for electric vehicle manufacturers.”

The renewable fuels industry recently received a boost from the oil industry in its efforts to expand the use of E15, gasoline blended with up to 15% ethanol.

The American Petroleum Institute and fuel marketing giant SIGMA joined renewable fuel and farming groups in sending a letter to Congressional leaders asking them to pass new legislation removing strict fuel volatility requirements for E15 that make the fuel less cost effective for fuel manufacturers to produce.

The support for E15 comes after a campaign by API and the American Fuel and Petrochemical Manufacturers to extend the same volatility requirements it now seeks to end. The groups previously said E15, and ethanol in general, was less efficient than the gasoline that harmed the environment, and that it put vehicles at risk of damage while increasing the price of food.

A recent study found the full lifespan of ethanol production is at least 24% more carbon intensive than the production of gasoline.

The Center for Biological Diversity filed a lawsuit in July claiming that the EPA failed to properly assess the impacts on endangered animals of land conversion and additional pesticide and fertilizer use that result from the Renewable Fuel Standard requirements.

The EPA will hold a virtual public hearing on the proposal Jan. 10. To register to listen in on the public hearing or to speak, send an email to RFS-Hearing@epa.gov by Jan. 3.

EPA Proposes Raising Biofuel Quotas in Fossil Fuels, Electric Vehicles