Ethanol groups urge EPA to increase F-factor for E85 FFVs

By Erin Voegele | October 27, 2020

The Renewable Fuels Association, Growth Energy and the American Coalition for Ethanol submitted comments to the U.S. EPA on Oct. 26 regarding the E85 flexible fuel vehicle (FFV) weighting factor (F-factor) for model year (MY) 2021 and later vehicles.

The agency published a notice in the Federal Register on Aug. 26 requesting public input on sources and analytical approaches on which to base an EPA determination of an updated F-factor for E85 FFVs for MY 2021 and later. The public comment period closed Oct. 26.

The notice explains that the F-factor for a given model year is used to weight the greenhouse gas (GHG) emission of an FFV operating on E85 with the GHG emissions of the vehicle operating on conventional gasoline when calculating the compliance value for that model year. The F-factor is also used in the corporate average fuel economy (CAFE) program for weighting the measured fuel economy of FFVs when operating on E85.

The EPA in late 2014 announced an F-factor of 0.14 would be applicable to 2016-2018 model year vehicles. In August 2019, the agency extended the use of the 0.14 F-factor to model year 2019.

EPA has since received a request from auto manufacturers to establish an F-factor for model year 2020 and later vehicles. The agency said it has not conducted a technical analysis to support the F-factor since 2014. In a letter extending the 0.14 F-factor through model year 2019, the EPA said it intended to develop a forward-looking analysis for model year 2020 and later based on the agency’s “assessment of real-world use of alternative fuel.”

In its Aug. 26 notice, the agency said while it’s intention was to update the methodology used to set the F-factor for 2016-2018, two new factors must be considered. First, the U.S. Energy Information Administration has made significant changes to the way it projects E85 usage in its annual energy outlook, which was an important input used to develop the F-factor for 2016-2018. Second, the COVID-19 pandemic has significantly changed market conditions for fuel usage, and the EPA said it is uncertain how future fuel markets will be affected.

“Given the potential impact that both of these factors have on the F-factor, and recognizing the need to provide certainty to the automakers for purposes of their planning for MY 2020, EPA has extended the use of the existing F-factor of 0.14 to model year 2020,” the agency said in the notice. “This provides the time necessary to request comment and consider further an appropriate methodology and related inputs as we move toward MY 2021 and beyond.”

The EPA also note that the 0.14 F-factor will remain in place beyond model year 2020 until the agency adopts a revised F-factor based on new data and updated methodology. In order to inform its approach to assessing an updated F-factor for model year 2021 and later, the EPA is requesting comments on the various data sources, analytical approaches, and potential alternatives to its draft methodology for assessing the F-factor in model years 2021 and later.

In its comments, the RFA supported the EPA’s new approach to maintaining some level of certainty for automakers in the absence of future guidance, but also called on the agency to provide a long-term floor and “more robust” E85 usage factors for future model years, given expected growth and the many benefits provided by ethanol flex fuels.

“Based on our discussion with automakers, it is clear that manufacturers will hesitate to invest in certain technologies, like FFVs, unless there is some assurance that those vehicles technologies will help enable CAFE and GHG standard compliance over multiple model years,” wrote Kelly Davis, RFA vice president for regulatory affairs. “Fuel blenders and retailers also need multi-year certainty regarding the likely mix of light-duty vehicles so that they may appropriately direct their investments in wholesale and retail fuel infrastructure.”

Davis noted that restoring a more meaningful E85 usage factor for FFV production can help to level the CAFE/GHG playing field that currently favors battery electric, plug-in hybrid electric, fuel cell and compressed natural gas vehicles. “While we agree with EPA that automakers should be encouraged to produce vehicles that reduce petroleum consumption to improve energy security, save the U.S. money, and reduce climate change impacts, we believe incentives to stimulate the production of such vehicles should be constructed fairly and consistently.”

As part of its comments, RFA submitted an analysis comparing the number of E85 stations listed on the association’s crowd-sourced database (www.E85prices.com) to the number of E85 stations listed by the Alternative Fuels Data Center. The former lists just over 5,000 stations known to sell E85 today, while AFDC’s database only contains roughly 3,600. This is important because EPA relies on the overly conservative AFDC database to inform its projections of future E85 availability and station growth. RFA encouraged EPA to use the E85price.com database to inform its future analyses.

Growth Energy urged the EPA to provide immediate credit to automakers to produce FFVs. “Recent trends in government and private investment in biofuels infrastructure and updated data on E85 availability all lead to growth in higher biofuel blends,” said Chris Bliley, senior vice president of regulatory affairs at Growth Energy. “EPA should seize on that data to provide appropriate, immediate credit to automakers to continue to produce flex-fuel vehicles to run on these higher biofuel blends.”

In the organization’s written comments, Growth Energy offered a detailed technical analysis on the benefits of an updated F-factor, noting that any upward revision should take immediate effect so it continues to accelerate automaker investment and innovation. The group specifically recommends that the EPA maintain an F-factor of 0.14 until it takes action for an upward revision; provide five years of F-factor continuity and an additional three-year safe harbor to automakers for automaker certainty; apply the Tenth Circuit Court of Appeals January decision on small refinery exemptions (SREs) nationwide; update station data for higher ethanol blends; and provide an updated F-factor of 0.2 for MY 2021 and later vehicles.

ACE said it supports and F-factor of at least 0.2 for MY 2021 and later vehicles and encourages the EPA to consider new, forward-looking data which indicate E85 use will significantly rise in the future. “Until such time EPA establishes a 0.20 or greater F-factor, ACE strongly encourages the agency to maintain the 0.14 F-factor, so the value does not default to zero,” wrote Brian Jennings, CEO of Ace. “We believe there are several reasons to support a minimum 0.20 F-factor going forward, including the fact that more stations sell E85 than assumed by EPA and the U.S. Department of Energy, the number of stations will significantly increase thanks to nearly half a billion dollars of infrastructure investment, and volumes of E85 will rise as station owners utilize carbon credit and renewable identification number (RIN) value to price the fuel at retail.”