BIO: EPA Inaction On RFS Proposal Has Increased GHG Emissions

Ethanol Producer Magazine

Sept 25, 2014

By Erin Voegele

A new report published by the Biotechnology Industry Organization indicates U.S. EPA inaction on finalizing the 2014 renewable fuel standard (RFS) has resulted in a significant increase in greenhouse gas (GHG) emissions.

In March, BIO released an analysis that predicted that EPA’s 2014 RFS proposal, if left unchanged, would result in increased emissions. That paper utilized U.S. Energy Information Administration projections for fuel use spanning from 2014 to 2022 to estimate volumes of petroleum and biofuel use for each year.  Based on EPA’s 2014 RFS proposal, the analysis determined the U.S. would emit 6.6 million more metric tons of CO2 equivalent GHG emissions this year than it did in 2013. If the EPA’s proposal, however, had allowed the overall RFS mandates for 2014 to remain at the statutory level, a GHG emissions reduction of 21.6 million metric tons could have been achieved on a CO2 equivalent basis. According to information published by BIO, the difference between the increase and achievable decrease is the equivalent of putting 5.9 million additional cars on the road next year.

Based on new EIA data on transportation fuel demand, BIO has now updated the results of that study. Recent EIA estimates indicate that U.S. transportation fuel demand in 2014 has increased and is already 2.5 billion gallons higher than projected in November 2013, when the EPA first released its 2014 RFS proposal.  “Because biofuel use is expected to increase only slightly in 2014 compared to 2013, the United States has missed the opportunity to achieve GHG emission reductions in 2014 through consistent RFS regulatory policy,” said BIO in its updated white paper.

Within the paper, BIO points out that since the EPA has not yet finalized the 2014 RFS rulemaking, oil refiners and biofuel producers have essentially been left to follow the proposed rule as guidance, effectively guaranteeing that biofuel use in 2014 will fall to near the levels EPA proposed.

The updated analysis considers two scenarios. The first is based on EPA’s 2014 RFS proposal. The second uses estimated volumes based on a waiver of cellulosic biofuel and a corresponding increase in advanced biofuel. Both scenarios were modeled on the GREET1.2013 model.

According to BIO, the newly modeled estimates of GHG emissions are higher across the board than those published by the organization in March. The change is attributed to the estimated changes in transportation fuel use for both 2013 and 2014. “It appears that it is no longer possible to achieve a year-over-year reduction in GHG emissions. The reduced estimate of petroleum diesel use and increased biodiesel use for 2013 created a larger reduction in GHG emissions in 2013 than can now be achieved in 2014. And while gasoline and diesel use have been rising in 2014, in the absence of a final rule oil refiners have blended ethanol and biodiesel only at rates consistent with EPA’s November 2013 proposal. They cannot now go back and blend at higher rates,” said BIO in the paper. “Unless actual fuel use again changes from current estimates, the United States will see an increase in GHG emissions from 2013 to 2014.”

BIO noted that the difference between the levels of modeled GHG emissions that result from EPA’s proposed volume obligations and those achievable through consistent enforcement of the RFS is more than 21 metric tons of CO2 equivalent, an amount comparable to putting 4.4 million cars on the road or the emissions of 5.5 new coal-fired power plants.

“During the U.N. Climate Summit this week, the Obama administration is sure to promote the regulatory actions it has taken to reduce climate change emissions from stationary sources such as power plants. But regulatory inaction on the RFS has opened the door to an increase in greenhouse gas emissions from the transportation sector,” said Brent Erickson, executive vice president of BIO’s Industrial and Environmental Section.

“Last November, EPA proposed a steep reduction in the use of biofuels in order to avoid hitting the so-called blend wall – a proposal the administration still has not finalized. What the agency failed to consider is that demand for transportation fuel has been increasing – the United States is now using several billion gallons more gasoline and diesel than projected. The so-called blend wall is an invention of the oil industry and has simply been a red herring,” he continued. “The administration must finalize the 2014 renewable fuel standard using a methodology based on biofuel production and continue the program’s successful support for commercialization of advanced and cellulosic biofuels. The renewable fuel industry has already created hundreds of thousands of good jobs and boosted economic growth.”

The EPA published its proposed rule for the 2014 RFS in mid-November. The comment period on the rulemaking closed on Jan. 28. On Aug. 22 the EPA delivered the final rule to the White House of Office and Budget for review. That review process is currently ongoing. The EPA’s Regulatory Development and Retrospective Review Tracker currently indicates the final rule is expected to be published in the Federal Register in October. The EPA’s review tracker also indicates the agency began work on the 2015 RFS proposal in June. According to EPA documentation, the notice of proposed rulemaking for the 2015 RFS rule is currently expected to be released in February.

A full copy of BIO’s white paper can be downloaded here.

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