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Panelists predict EPA will revise proposed RFS targets higher in final rule

Highlights

The proposed blending targets in the 2014 Renewable Fuel Standard will likely be revised higher, advocates for multiple industries said Monday.

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Proponents of the ethanol, biodiesel, advanced biofuels, petrochemicals and biotechnology industries, who were speaking during the Advanced Biofuels Leadership Conference Monday in Washington, agreed that the US Environmental Protection Agency's proposed blending targets launched counterproductive uncertainty and, if finalized, would have a massively detrimental effect across multiple markets.

For 2014, the EPA has proposed cutting the required volume of biofuels to 15.21 billion gallons, down from 16.55 billion gallons in 2013, citing the inability of the US fueling infrastructure to absorb blends higher than 10% -- the so-called E10 blend wall.


When asked to make predictions on what direction the EPA might take with its finalized blending targets, the panelists even struggled to agree on when the numbers might be released. The EPA has said that the finalized mandates will be released by June 20, but most were skeptical that the agency will meet its own deadline.

"I think the easiest thing to predict is that we'll be in court after the numbers come out, one way or the other," said Mike McAdams, president of the Advanced Biofuels Association.

Should the proposed reduction of the RFS be finalized, the greenhouse gas effects would be as large as adding 5.9 million cars to the roads or opening seven and a half new coal-fired power plants, Brent Erickson of the Biotechnology Industry Organization said.

Anne Steckel, vice president of federal affairs for the National Biodiesel Board, said that the proposed mandate of 1.28 billion gallons of biomass-based diesel production deflated the confidence of an industry coming off a record year in 2013, when more than 2 billion gallons of biodiesel were produced.

"We've heard the rhetoric from this administration that they support clean air and renewable fuels, but the proposal that was put out was not in line with that rhetoric," Steckel said.

Brooke Coleman of the Advanced Ethanol Council argued that the skyrocketing RINs prices seen in 2013, which launched an anti-RFS sentiment throughout the country, were a function of the oil industry's resilience to biofuels.

"They liked us more when we were the cute little puppy industry," Coleman said. "But now that we're competition at the gas pumps, they want us gone."

On the petrochemical side, Corinne Young of the re:chem alliance said that a reduction in the RFS growth would force companies and investors to find foreign alternatives for new production facilities due to a lack of sound investment in feedstock technology.

--Jordan Godwin, jordan.godwin@platts.com
--Edited by Annie Siebert, ann.siebert@platts.com