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US biofuel industry hopes their voices are heard as EPA eyes final rules on E15, RFS

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US biofuel industry hopes their voices are heard as EPA eyes final rules on E15, RFS

Highlights

E15 solution for Midwest states coming: Regan

Biofuel group pushes for nationwide action

Lays out industry priorities for next RFS rulemaking

A promise by US Environmental Protection Agency Administrator Michael Regan to lift a summertime ban on sales of a gasoline blend containing 15% ethanol in certain Midwest states was appreciated by biofuel advocates, but falls short of the nationwide solution they seek.

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While E10, which contains 10% ethanol, is widely available from retailers year-round, E15 cannot be sold in conventional gasoline markets from June 1 to Sept. 15 due to EPA restrictions on air pollution.

That blackout period was lifted by the Trump administration, but the DC Circuit Court of Appeals last year vacated the 2019 EPA rule that extended a summertime waiver of Reid Vapor Pressure requirements to biofuel blends containing more than 10% ethanol (American Fuel & Petrochemical Manufacturers v. EPA, 19-1124).

Governors from eight Midwest states have notified the EPA that they intend to exercise their Clean Air Act authority to ensure E15 can permanently be sold in their states year-round.

Regan, at the annual Biofuels Summit convened by Growth Energy Sept. 13, said the EPA is actively engaged with those governors and is taking steps to promulgate a rulemaking as quickly as possible, with the intention of finalizing that "action in time for the 2023 summer driving season."

But Renewable Fuels Association CEO Geoff Cooper told reporters that the EPA's actions on that front are pretty much nondiscretionary because the governors' authority in this area means the agency "doesn't have much choice other than to rubber stamp those requests."

Permanent fix

The summertime sales ban impacts about 80% of the roughly 2,300 existing E15 retail locations. It does not impede year-round E15 sales in reformulated gasoline markets, representing about 30% of the US gasoline market.

The EPA in April issued an emergency fuel waiver to ensure nationwide access to the fuel as part of efforts to ease pain at the pump, and through a series of 23 extensions of that temporary waiver prevented disruptions to the summertime fuel supply.

Biofuel advocates cheered the quick and decisive action by the EPA this summer but have sought a permanent, nationwide solution. They contend that the summertime barrier to sales has deterred some retailers from offering E15 and threatens to devastate the market expansion of homegrown biofuels if it is not resolved.

"EPA could and they have the authority to do what these eight states have asked them to do for all 50 states, which is simply requiring a slightly lower volatility for conventional gasoline blendstock that refiners would be compelled to produce a uniform blendstock for E10 or E15," Cooper said.

Legislation could also solve the issue, and a fix was included in the Lower Food and Fuel Costs Act, H.R. 7606, House Democrats' response to soaring gasoline prices exacerbated by Russia's invasion of Ukraine and inflation that sent the price of food and other goods skyrocketing.

That bill passed the House of Representatives June 16 in a 221-204 vote that saw a dozen lawmakers cross the aisle as seven Republicans voted with the majority and five Democrats joined the rest of the GOP to vote against the bill.

Narrow margins in the Senate make passage of any bill a formidable task, even thought the issues this measure addresses have not typically solely been decided down party lines, with lawmakers instead weighing farm versus oil interests.

"We are of course looking for any opportunity to advance that legislation in the Senate and that would be the cleanest and fastest way to resolve this problem. But it's also the most uncertain path forward in my mind," Cooper said.

RFS

Regan, in his address, also noted ongoing work on the Renewable Fuel Standard program as the agency tackles the RFS set rule.

That "set" refers to the need for the EPA, in coordination with the departments of Energy and Agriculture, to determine renewable fuel volume obligations (RVOs) for 2023 and beyond, years for which Congress no longer specifies RFS volume targets.

As part of a recent consent agreement reached with Growth Energy to settle litigation over delays in promulgating those rules, the EPA agreed to sign a notice of proposed rulemaking establishing RFS requirements by Nov. 16 and to sign a final rule on the matter by June 14, 2023.

Regan said the agency will "analyze multiple factors to determine the volume requirements including but not limited to environmental and economic costs, job creation, price, energy security and rural economic development."

Cooper said that RFA has been engaged with the agency on the set rulemaking.

He added that he would also like to see the EPA publish several years of standards at a time "to help provide some certainty and stability to the marketplace," as well as tackle "a few things that need cleaned up with the RFS," such as new pathway registrations and approvals and how electricity can participate in the RFS.