EPA reduces the 2013 cellulosic RFS to reflect actual production

By Erin Voegele | April 23, 2014

The U.S. EPA has taken action to revise the 2013 cellulosic biofuel requirements under the renewable fuels standard (RFS). On April 23, the agency published prepublication versions of a notice of proposed rulemaking and a direct final rule to reduce the 2013 cellulosic RFS requirement to 810,185 ethanol-equivalent gallons, the volume for which cellulosic RINs were generated in 2013. On a percentage basis, that equates to approximately 0.0005 percent of U.S. transportation fuel.

The EPA originally set the 2013 cellulosic standard at 6 million gallons in its 2013 RFS rulemaking, which was finalized in August 2013.  

In October, the EPA received petitions from the American Fuel and Petrochemicals Manufacturers and the American Petroleum Institute requesting reconsideration of the cellulosic requirements. In January, the EPA announced it would grant the petitions for reconsideration. At that time, EPA Administrator Gina McCarthy issued two similar letters to the API and AFPM stating that the EPA had determined that their respective petitions did demonstrate the necessary statutory criteria. Within those letters, McCarthy noted that the API and AFPM identified information relevant to the rulemaking that became available after the public comment period closed, but within the time period specified for judicial review. That information pertained specifically to KiOR Inc.’s August announcement that reduced its expected cellulosic fuel production for 2013. According to the EPA, that information justified reconsideration of the 2013 cellulosic standard. 

In a fact sheet posted to its website, the EPA said it is publishing a direct final rule without a prior proposed rule because the agency views this as a noncontroversial action. “Finalizing this adjusted 2013 cellulosic biofuel standard expeditiously will reduce regulatory uncertainty and avoid unnecessary cost or burden for obligated parties,” said the EPA in the statement, noting that until the adjusted cellulosic biofuel standard is finalized, obligated parties will have to comply with the current 6 million gallons standard. According to the EPA, that would likely involve the substantial purchase of cellulosic waiver credits, which the agency would subsequently need to reimburse.

The direct final rule will become effective 60 days after its official publication in the Federal Register unless the EPA receives relevant adverse comment within 30 days of the date it is published in the Federal Register. In the event the EPA does receive adverse comment on the matter, it will withdraw the direct final rule and proceed with the alternative notice of proposed rulemaking. Both the proposed rule and direct final rule are expected to be published in the Federal Register soon.