US EPA commits to meet Nov. 30 deadline to sign proposal setting new biofuel mandates

The US Environmental Protection Agency said that it would meet a court-ordered Nov. 30 deadline to sign a proposed rule laying out the amount of renewable fuel that US refiners must annually mix with gasoline and diesel.

The rulemaking will mark the first Renewable Fuel Standard proposal for which there are no congressional recommendations on the books. The so-called RFS "set" rule refers to the need for the agency, in coordination with the departments of Energy and Agriculture, to determine renewable volume obligations for 2023 and beyond, years for which Congress no longer specifies RFS volume targets.

"After signature, the agency will make the proposal available for public review and comment," EPA spokesperson Khanya Brann said Nov. 30 in an email.

Industry sources, however, suggested that the public may not see the proposal until later in the week.

Ethanol group Growth Energy kept the pressure on the EPA to end delays seen year after year that have plagued promulgating annual mandates for the RFS program. Under a consent agreement with the trade group to which a two-week extension was subsequently applied, the EPA is obligated to sign a proposed rule setting the 2023 RVO by Nov. 30, and must sign a final rule on the new blending requirements by June 14, 2023.

Little is known about what the rule will entail, including whether it will propose RVOs for just 2023 or multiple years.

The agency earlier in the year drew ire from both biofuel advocates and refiners after issuing a final rule that retroactively eased blending requirements for refiners in 2020 and 2021 ahead of raising the blending mandate to its highest level on record for 2022.

Bullish RINs market

Biofuel advocates have pressed the agency for a multi-year rulemaking to bring certainty to producers after years of delays in setting the annual RVOs and hope to see mandates that spur growth in ethanol and biodiesel production.

Some refiners, on the other hand, have argued for lower mandates as they contend the RFS compliance system is broken, creating a bullish Renewable Identification Numbers market, adding uncertainty for struggling refiners and exacerbating high consumer fuel costs.

RINs are tradable credits EPA issues to track production and use of alternative transportation fuels. For corn-based ethanol, one gallon of ethanol yields one RIN.

The Fueling American Jobs Coalition, which represents independent refiners, fuel retailers and union workers, maintains that independent refiners are paying more on RIN costs to comply with the RFS than all their operational costs combined. The group asserts that high and volatile RIN prices are partially to blame for refinery closures seen in the past two years, and that those closures contributed to record high gasoline prices.

The coalition has repeatedly called on the EPA to lower ethanol blending requirements to match the maximum amount of ethanol the US fuel supply can physically handle, given engine and infrastructure constraints, referred to as the blend wall.