The new Renewable Fuel Standard

The Environmental Protection Agency (EPA) is proposing revisions to the National Renewable Fuel Standard program (more commonly known as RFS).  The proposed rule is intended to address changes mandated by the Energy Independence and Security Act of 2007 (EISA).

The recently legislated requirements establish, and in some cases adjust, specific volume standards for cellulosic biofuel, biomass-based diesel, advanced biofuel, and total renewable fuel that must be used as, or in, transportation fuel each year.

The requirements include new definitions and criteria for renewable fuels and the feedstocks used to produce them. The EPA has also proposed new greenhouse gas emission (GHG) thresholds for renewable fuels.

Importantly, these new RFS requirements will apply to producers and importers of renewable fuel that are both foreign and domestic.

The passage of EISA expanded the coverage of the RFS program beyond gasoline to broadly cover all transportation fuels, including diesel fuel used in highway vehicles and engines as well as offroad, marine and locomotive engines.

Mirroring the same approach adopted to implement RFS 1, the EPA believes these provisions should be applied to refiners, blenders, and importers of transportation fuel with the designated percentage standards applicable to the total amount of gasoline and diesel produced.  Some special caveats exist for small refiners which are intended to decrease the administrative burden these rules create.

Ultimately RFS under the new act is expected to reduce American reliance on foreign oil sources, increase the domestic production of energy, foment the reduction of greenhouse gas emissions (GHG) , and diversify the American renewable energy portfolio.

The increased use of renewable fuels like biodiesel may also expand the market for agricultural products used in fuel production and accelerate the growth of new markets focused on the development of cellulosic feedstocks and production technologies.

The volumes of renewable fuel are specified by statute and will ultimately affect the price of fuel paid by the consumer.

In my next few posts I will discuss various aspects of RFS2 as the EPA approaches its final decisions on implementation. The discussion will include the topic of Renewable Identification Numbers (RINS), fuel quantity targets, and compliance issues that directly affect small producers like Promethean.

Make it a better place.