EPA Announces Proposed Renewable Fuel Standards
On July 12, the U.S. Environmental Protection Agency (EPA) announced its proposal for 2011 standards for the four fuels categories under its Renewable Fuel Standard Program (RFS2). The proposed 2011 standards are:
- Biomass-Based Diesel (0.80 billion gallons; 0.68 percent)
- Advanced Biofuels (1.35 billion gallons; 0.77 percent)
- Cellulosic Biofuels (5-17.1 million gallons; 0.004-0.015 percent)
- Total Renewable Fuels (13.95 billion gallons; 7.95 percent)
These standards derive from the Energy Independence and Security Act of 2007 (EISA), which established annual renewable fuel volume goals designed to ultimately reach an overall level of 36 billion gallons in 2022. EPA calculated the proposed percentages to achieve the target volume for 2011. As a result, all those involved in the production of commercial transportation fuel must ensure that such fuel contains the requisite minimum volume of renewable fuel.
EPA also announced proposed changes to the RFS2 regulations regarding the use of canola oil, grain sorghum, pulpwood, and palm oil as feedstock. Under these changes, fuels made using these feedstocks on or after July 1, 2010, may be used for compliance if EPA determines in a future rulemaking that these fuels meet certain greenhouse gas reduction levels. Also, EPA would set documentation criteria that would allow foreign feedstocks to be treated as if they were domestic, enabling their use to make fuels qualified under RFS2.
Due to low market availability, EPA has proposed a lower cellulosic volume than that targeted in the EISA. As noted here previously, the conversion of cellulose to ethanol is technologically more challenging than the conversion of corn or sugar. Currently, the processes used to convert cellulose to ethanol are too expensive for the resulting fuels to be commercially viable. Despite these challenges, EPA is confident that commercial cellulosic biofuels will be more available in the future. Moving forward, EPA’s targeted percentage of cellulosic biofuels output increases dramatically, with a goal of 16 billion gallons in 2022. This aggressive increase provides a strong indication of where research and development efforts, and the resulting intellectual property, will be focused in the biofuels industry over the next decade.