Reports: EPA to Propose 2017 RFS Volume Obligations Today

Posted on 03/09/2017 10:23 AM

The EPA reportedly today at around 2 p.m. ET will propose 2017 Renewable Fuel Standard (RFS) volume requirements for ethanol and other biofuels. Some sources signal the corn-based ethanol volume requirement will be set at 14.8 billion gallons. If so, that would be below the statutory level of 15 billion gallons.

Renewable fuel credits, known as RINs, rallied on expectations on the announcement, which is likely to increase volume requirements for next year for ethanol use in the nation's motor fuel. RINs for 2016 ethanol traded as high as 80 cents midmorning, up from 73 cents earlier in the day.

Refiners would have to blend 18.8 billion gallons of biofuels into the nation’s gasoline and diesel supply in 2017, sources say. Renewable fuels such as corn-based ethanol could help satisfy 14.8 billion gallons of those targets, according to sources. Another 4 billion gallons would come from advanced biofuels, including cellulosic ethanol, under the EPA quotas. The conjectured proposed 2017 volumes represent a modest increase over the 18.11 billion gallons of biofuels the agency required in 2016, but still far below a 24 billion gallon level lawmakers established in a 2007 law.
 

EPA issued the last RFS proposal on May 29 and the final rule on Nov. 30. In a Senate Committee on Environment and Public Works hearing held Feb. 24, Janet McCabe, acting assistant administrator of EPA, said the agency is on track to meet deadlines to propose volume targets and issue final rules.

"Gasoline demand continues to rise," Bob Dinneen, head of the Renewable Fuels Association, told reporters May 6. "They will perhaps incrementally increase the number this year but not go to the statute."

Americans will consume a record 143 billion gallons of gasoline this year, the Energy Information Administration forecast May 10 in its Short-Term Energy Outlook.

The EPA required 18.11 billion gallons of renewable fuels to be used in 2016, with 3.61 billion gallons of that required to come from advanced biofuels.

Meanwhile, Valero has petitioned the EPA to reconsider and revise who is an "obligated party" under the program, shifting it away from the refiners that now carry the biofuel-blending burden.

Here is what EPA announced Nov. 30, 2015:

 

Final Renewable Fuel Volumes

Item

2014

2015

2016

2017

Cellulosic biofuel (million gallons)

33

123

230

n/a

Biomass-based diesel (billion gallons)

1.63

1.73

1.90

2.00

Advanced biofuel (billion gallons)

2.67

2.88

3.61

n/a

Renewable fuel (billion gallons)

16.28

16.93

18.11

n/a

(Units for all volumes are ethanol-equivalent, except for biomass-based diesel volumes which are expressed as physical gallons.)

  • 2014 total US renewable fuels mandates at 16.28 billion gallons
  • 2015 total US renewable fuels mandates at 16.93 billion gallons
  • 2016 total US renewable fuels mandates at 18.11 billion gallons
  • 2014 ethanol target at 13.61 billion gallons
  • 2015 ethanol target at 14.05 billion gallons
  • 2016 ethanol target at 14.5 billion gallons
  • 2014 mandate for biodiesel at 1.63 billion gallons
  • 2015 mandate for biodiesel at 1.73 billion gallons
  • 2016 mandate for biomass-based diesel (biodiesel) at 1.9 billion gallons
  • 2017 mandate for biodiesel at 2.0 billion gallons

 

Final Percentage Standards

Item

2014

2015

2016

Cellulosic biofuel

0.019%

0.069%

0.128%

Biomass-based diesel

1.41%

1.49%

1.59%

Advanced biofuel

1.51%

1.62%

2.01%

Renewable fuel

9.19%

9.52%

10.10%


The final 2016 standard for advanced biofuel is nearly 1 billion gallons, or 35%, higher than the actual 2014 volumes, while the total renewable standard requires growth from 2014 to 2016 of over 1.8 billion gallons of biofuel, or 11% higher than 2014 actual volumes. Biodiesel standards grow steadily over the next several years, increasing every year to reach 2 billion gallons by 2017.

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