Renewable Fuel Standard

The Renewable Fuel Standard (RFS) is an American federal program that requires transportation fuel sold in the U.S. to contain a minimum volume of renewable fuels. The RFS originated with the Energy Policy Act of 2005 and was expanded and extended by the Energy Independence and Security Act of 2007 (EISA).

History

The RFS program requires renewable fuel to be blended into transportation fuel in increasing amounts each year, escalating to 36 billion gallons by 2022. Each renewable fuel category in the RFS program must emit lower levels of greenhouse gases relative to the petroleum fuel it replaces.[1]

The first RFS, usually referred to as RFS1, required that 4 billion gallons of biofuel be used in 2006. This requirement was scheduled to rise to 7.5 billion gallons in 2012. These requirements were passed as part of the Energy Policy Act of 2005. The Energy Independence and Security Act of 2007 changed and broadened these rules. EISA was signed into law by President George W. Bush and the bill was overwhelmingly supported by members of congress from both parties.[2]

The changes required by the 2007 legislation are usually referred to as RFS2. RFS2 required the use of 9 billion gallons in 2008 and scheduled a requirement for 36 billion gallons in 2022. The quota for 2022 was to allow no more than a maximum of 15 billion gallons from corn-starch ethanol and a minimum of 16 billion gallons from cellulosic biofuels.[2]

Enforcement and administration

The United States Environmental Protection Agency (EPA) administers the RFS program with volume requirements for several categories of renewable fuels.[3] The EPA issued detailed regulations for implementing RFS1 in April 2007. These regulations established rules for fuel suppliers, created the Renewable Identification Numbers (RIN) scheme for compliance and trading credits, and rules for waivers. The EPA calculates a blending standard for each year based on estimates of gasoline usage created by the Department of Energy's Energy Information Agency. Separate quotas and blending requirements are determined for cellulosic biofuels, biomass-based diesel, advanced biofuels, and total renewable fuel. Exemptions for small producers are considering when calculating blending ratios.[2][4]

The individual obligations for producers are called Renewable Volume Obligations (RVO). An RVO is determined by multiplying the output of the producer by the EPA's announced blending ratios for each of the four standards described above. The producer has to show compliance through the RIN system. It can purchase RINs to makeup for any shortfall in production. Surplus RINs can be sold. This is done through the EPA's Moderated Transaction System.[2] According to the the EPA the EPA established an RVO of 18.11 million gallons total for 2016. [4]

On May 29, 2015, the EPA set an RVO lower than the benchmarks established by Congress. This generated criticism from all sides of the issue. The EPA was also blamed for missing legal deadlines to revise the RVO targets. Some say this introduced market uncertainty, harming both consumers and producers. The EPA made this announcement in May to meet a June 1, 2015 deadline established by a settlement to suit brought by fossil fuel and chemical trade associations. The EPA defended the targets calling them "ambitious but responsible" and arguing that "Biofuels remain an important part of the overall strategy to enhance energy security and address climate change." The EPA announcement called for a 27-percent increase in the use of advanced biofuels from 2014 to 2016. Most gasoline used in the United States is blended to E10, giving it a relatively low ethanol content. The May 2015 rule changes thus created incentives to make greater use of E85 and E15, which contain much more ethanol.[5]

Feedstock

Under EISA, "renewable fuel" was defined as being made from biomass but also restricted the type of land on which permissible feedstock could be grown. Land put into cultivation after 13 December 2007 was excluded. Tree crops, tree residues, and biomass grown on federal land were all excluded as permissible feedstock.[2]

References

  1. ↑ "Renewable Fuel Standard". US Department of Energy Alternative Fuels Data Center. Retrieved 15 January 2013.
  2. 1 2 3 4 5 Schnepf, Randy; Yacobucci, Brent (14 October 2010). Renewable Fuel Standard: Overview and Issues. United States: Congressional Research Service.
  3. ↑ "Renewable Fuel Standard". US Environmental Protection Agency. Retrieved 15 January 2013.
  4. 1 2 Swift, Wes (19 April 2016). "RIN generation is up, but more biofuels mandates are on the way". The Barrel: The essential perspective on global commodities. PLATTS McGraw-Hill Financial. Retrieved 20 April 2016.
  5. ↑ Neuhauser, Alan (29 May 2015). "EPA Raises Fuel Requirements, Lowers Standards, Upsets Everybody". U.S. News (United States). Retrieved 20 April 2016.
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