EPA sets 2014, 2015 and 2016 RFS RVOs

By Erin Voegele | November 30, 2015

The U.S. EPA has released its long-anticipated final rule setting the 2014, 2015 and 2016 renewable volume requirements (RVOs) under the renewable fuel standard (RFS), along with the 2017 RVO for biomass-based diesel. While the rulemaking increases volume requirements above levels proposed in May and takes a small step in overcoming the E10 blend wall in 2016, the RVOs fall below statutory levels.

The EPA has set 2014 and 2015 RVOs at levels reflecting actual biofuel use during those years. For 2014, the rule requires 16.28 billion gallons of renewable fuel, including 33 million gallons of cellulosic biofuel, 1.63 billion gallons of biomass-based diesel, and 2.67 billion gallons of advanced biofuel. On a percentage basis, the 2014 requirement for cellulosic biofuel is 0.019 percent, with the biomass-based diesel requirement set at 1.41 percent, the advanced biofuel requirement set at 1.51 percent and the renewable fuel volume set at 9.19 percent. When compared to the proposed rule released in May, the proposed percentage standard for cellulosic biofuel has been maintained at 0.019 percent, while the proposed percentage standard for biomass-based diesel has dropped slightly from 1.42 percent. The advanced biofuel requirement also dropped slightly from 1.52 percent. The total renewable fuel percentage however, increased slightly from the originally proposed 9.02 percent. The statutory volume requirements for 2014 would have included 18.15 billion gallons of total renewable fuel, including 1.75 billion gallons of cellulosic biofuel and 3.75 billion gallons of advanced biofuel. Overall, the 2014 volume requirement falls 1.87 billion gallons below volumes called for in the RFS statute.

For 2015, the EPA’s final RVO is 16.28 billion gallons of renewable fuel, including 123 million gallons of cellulosic biofuel, 1.73 billion gallons of biomass-based diesel, and 2.88 billion gallons of advanced biofuel. On a percentage basis, the rule calls for 0.069 percent U.S. transportation fuel to be comprised cellulosic biofuel, up from 0.059 proposed in May; 1.49 percent for biomass-based diesel, up from the proposed 1.41 percent; 1.62 percent for advanced biofuel, up from the proposed 1.61 percent; and 9.52 percent of renewable fuel, up from the 9.04 percent proposed in May. Statutory levels for 2015 would have been set at 20.5 billion gallons, including 3 billion gallons of cellulosic biofuel, and 5.5 billion gallons of advanced biofuel. Overall, the final 2015 RVO falls 4.22 billion gallons short of the level called for by statute.

For 2016, the EPA has set the RVO for renewable fuel at 18.11 billion gallons, including 230 million gallons of cellulosic biofuel, 1.9 billion gallons of biomass-based diesel, and 3.61 billion gallons of advanced biofuel. On a percentage basis, the rule calls for total biofuels to account for 10.10 percent of the transportation fuel pool, up from the proposed 9.63 percent announced in May. The percentage for cellulosic biofuel is 0.128 percent, up from a proposed 0.114 percent. The percentage for biomass-based diesel has also increased, from a proposed 1.49 percent to a level of 1.59 percent. In addition, the percentage requirement for advanced biofuel has increased from a proposed 1.88 percent to 2.01 percent. Statutory levels for 2016 would have been set at 22.25 billion gallons of total renewable fuel, including 4.25 billion gallons of cellulosic biofuels and 7.25 billion gallons of advanced biofuel. Overall, the final 2016 RVO falls 4.14 billion gallons short of the level called for by statute.

The rule also sets the 2017 requirement for biomass-based diesel at 2 billion gallons, up from the 1.9 billion gallons proposed in May.

According to the EPA, final 2016 standards for advanced biofuel are set 35 percent higher than 2014 actual volumes, with the total 2016 renewable fuel requirements increasing by 11 percent over 2014 volumes. Regarding the E10 blend wall, the EPA indicated in its rulemaking that the “final rule includes volumes of renewable fuel that will require either ethanol use at levels significantly beyond the level of the E10 blendwall, or significantly greater use of non-ethanol renewable fuels, such as biodiesel and renewable diesel, than has occurred to date, depending on how the market responds to the standards we set.”

“The biofuel industry is an incredible American success story, and the RFS program has been an important driver of that success—cutting carbon pollution, reducing our dependence on foreign oil, and sparking rural economic development,” said Janet McCabe, the acting assistant administrator for EPA’s Office of Air and Radiation. “With today’s final rule, and as Congress intended, EPA is establishing volumes that go beyond historic levels and grow the amount of biofuel in the market over time. Our standards provide for ambitious, achievable growth.”

During a conference call to announce the RVOs, McCabe noted that the requirements are designed to go beyond the blend wall, as Congress intended. “In today’s final rule, we use the tools congress provided to make adjustments to the law’s volume targets, but we are changing the requirements only to the degree necessary,” she said. “The standards that we are finalizing today will continue to propel growth in renewable use.”

“We are optimistic about the future of biofuels,” McCabe continued. “U.S. companies have invested money, technology and brain power into new commercial-scale cellulosic plants. Advanced fuels are an emerging market that’s creating jobs in rural America, limiting carbon pollution and that will reduce our dependence on oil, so we believe this final rule is a strong step on a path towards steady growth in the years to come.”

According to McCabe, the RFS is intended to push increased availability of renewable fuels. Noting that fuels like E10 will still be available, she said the EPA anticipates increased availability of fuels like E85 and E15.