By Stephanie Kelly and Jarrett Renshaw
(Reuters) – The Biden administration on Wednesday increased the amount of biofuels oil refiners must incorporate into the country’s fuel mix over the next three years, but the plan has drawn ire from the biofuels industry, who says the mandates for corn-based ethanol and biodiesel aren’t high enough.
The U.S. Environmental Protection Agency finalized biofuel blend volumes at 20.94 billion gallons in 2023, 21.54 billion gallons in 2024, and 22.33 billion gallons in 2025. This compares to the initial proposal announced in December of 20.82 billion in 2023, 21.87 billion in 2024, and 22.68 billion in 2025.
But the finalized volumes only include 15 billion gallons of conventional biofuels like corn-based ethanol over the three years, plus an additional 250 million gallons for 2023. That’s down from the original proposal. , which included 15 billion gallons of conventional biofuels. in 2023 and 15.25 billion gallons in 2024 and 2025.
The plan also calls for modest increases in biomass diesel volumes over the proposal, despite major lobbying from groups that produce biodiesel, renewable diesel and sustainable aviation fuel to increase volumes.
The announcement drew strong rebukes from ethanol and biodiesel groups.
“Industry has responded to signals from the Biden administration and Congress to rapidly decarbonize U.S. fuel markets, especially aviation, marine and heavy transportation, and to make clean fuels available to more consumers,” said Kurt Kovarik, vice president of federal affairs. with Clean Fuels, a biodiesel group. “The volumes the EPA finalized today are not high enough to support these goals.”
The Renewable Fuels Association called the ethanol mandate cuts “unexplainable” and “unjustified.”
The final rule marks a new phase in the US Renewable Fuel Standard program, which is more than a decade old and frequently pits the powerful oil and biofuel industries against each other. Under the RFS, oil refiners must blend billions of gallons of biofuels into the nation’s fuel mix or buy marketable credits from those who do.
Ethanol producers and corn producers like the mandates because they provide a market for their products, while the oil industry finds the requirements too onerous.
While Congress has set specific goals for the program through 2022, the law extends EPA’s authority for 2023 and beyond to change how the RFS is administered.
The EPA said the finalized rule would reduce reliance on foreign sources of oil by 130,000 to 140,000 barrels per day over the 2023-2025 period.
Prices for renewable fuel credits in the United States fell 8% after the news, trading at $1.34 each from $1.46 each the previous day, traders said. Biomass-based credits fell to $1.38 each from $1.48 each the previous day.
OTHER PROVISIONS
The EPA also set out a series of regulatory changes in the final rule, intended to strengthen the agency’s implementation of the RFS program.
The agency will amend the provisions for renewable fuels derived from biogas to ensure that biogas is produced from renewable biomass and used as a transport fuel, as well as to allow the use of biogas as a biointermediate.
However, the rule was missing from the rule, a long-awaited avenue by EV makers to generate lucrative credits under the RFS, although it was included in the original December proposal. Reuters previously reported that the administration planned to scrap the program due to lawsuit fears.
The plan would have given automakers of electric vehicles, such as Tesla, credits to charge vehicles using electricity generated from renewable natural gas or methane collected from sources such as livestock or landfills.
The EPA said Wednesday it would continue to evaluate stakeholder feedback it received on the electric vehicle program and work on potential paths forward.
U.S. fuel and petrochemical makers said they were pleased to see the EPA drop the EV program, saying the RFS is a liquid fuels program that shouldn’t include electric vehicles.
Category 2023 Final 2023 2024 Final 2024 2025 Final 2025
Proposed Proposed Proposed
(billions
gallons)
Cellulose 0.72 0.84 1.42 1.09 2.13 1.38
biofuel
Biomass-ba 2.82 2.82 2.89 3.04 2.95 3.35
diesel
Advanced 5.82 5.94 6.62 6.54 7.43 7.33
biofuel
Non-cellular 5.10 5.10 5.20 5.45 5.30 5.95
osic
advance
Congress 15.0 15.0 15.25 15.0 15.25 15.0
Al
Total 20.82 20.94 21.87 21.54 22.68 22.33
renewable
fuel
Supplement 0.25 0.25 N/AN/AN/AN/A
Al
Standard
*units are
billion
gallon
(Reporting by Stephanie Kelly and Jarrett Renshaw; Editing by Mark Porter, Jonathan Oatis and Nick Zieminski)