Pending legislation would alter how RFS volumes are set

By Erin Voegele | February 07, 2013

On Feb. 6 Rep. Gregg Harper, R-Miss., introduced legislation that aims to amend the Clean Air Act to require the U.S. EPA to based its cellulosic biofuel targets under the renewable fuel standard (RFS) on actual production. The bill, H.B. 550, or the “Phantom Fuel Reform Act of 2013,” was referred to the House Committee on Energy and Commerce. Rep. Jim Matheson, D-Utah, has signed on to cosponsor the bill.

According to a copy of the legislation that Harper’s office provided to Biomass Magazine/Ethanol Producer Magazine, for each cellulosic biofuel plant that is producing—and continues to produce—from Jan. 1 through Oct. 31 of the current year, the EPA would determine the average monthly volume of cellulosic fuel produced and use that average to determine the estimated annualized volume for the entire year. Taken together, the production volumes for all existing plants would be used to set the volume requirements for the following year. For plants that begin production after Jan. 1 of a particular year, the average monthly volume would be determined from production values starting at the day of production startup through Oct. 31.

The biofuel industry has criticized the legislation. The Fuels American coalition said in a statement that the legislation is short-sighted and plays into the hands of oil companies looking to undermine the renewable fuel industry. “This bill guarantees that there would never be an incentive to produce any more cellulosic renewable fuel than was made last year, hardly a recipe for spurring innovation and investment,” said the coalition in a statement.

“Trade organizations for the petroleum industry are trying to convince members of Congress that the renewable fuel standard is the cause of recent higher gas prices. Congress members should not be fooled into undermining the nation’s plan to reduce reliance on foreign oil. The fact is the RFS is working,” said Brent Erickson, executive vice president of the Biotechnology Industry Organization’s Industrial & Environmental Section. “Representatives of the oil industry recently told the U.S. Court of Appeals for the D.C. Circuit that oil companies have already paid more than $17 million for cellulosic waiver credits. The truth is the industry has purchased fewer than $5 million in credits, because companies exercised many different options for meeting the requirements. The cost to consumers worked out to less than $0.00001 out of every dollar spent at the pump.”

Growth Energy has also spoken out against the bill. “This is bad policy, plain and simple,” said Tom Buis, CEO of Growth Energy. “This is nothing more than a well-disguised end run around the RFS, attempting to eliminate the use of biofuels in the commercial marketplace. While supporters claim that this is fair and sensible legislation, all it is actually nothing but pandering to the wishes of the oil industry.”