December 05, 2018

EPA Caps Busy Week for Biofuels With Release of Renewable Volume Obligations

On November 30, the EPA released its final rule for 2019/2020 renewable volume obligations (RVOs) for the Renewable Fuel Standard. The move establishes the marketplace for ethanol and other renewable fuels for the coming year. In its Final Rule, the EPA maintains the 15 billion gallon Conventional Biofuel mandate while increasing Advance Biofuels by 630 million gallons, Cellulosic Biofuels by 130 million gallons and Biomass-based Diesel volumes by 330 million gallons for 2020. The final rule marks a slight improvement over the Agency’s proposal this summer.

Stakeholder Reactions — On Both Sides

As with all policies related to the RFS, there was something to like and dislike for all stakeholders. Supporters will appreciate that the Conventional Biofuel volumes were maintained and that the various subcategories of Advanced Biofuels were increased. However, advocates are disappointed that the volumes lost to ‘hardship waivers’ (over 2 billion gallons) were not reinstituted into the program.

In addition to taking the other side on those two points, opponents of the program will point to the recent reference to the program’s “reset” provision that was cited in the Administration’s Semiannual Unified Regulatory Agenda as hope that the program’s ambitious goals will be reined in. The ‘reset’ provision requires EPA to reexamine the prescribed volumes moving forward if production volumes continue to miss statutory goals. That reset discussion will have enormous political implications given the program’s popularity in the Midwest, particularly Iowa. 

What’s Next in Congress?

On Capitol Hill, the renewable fuel industry is front-and-center in the tax extenders debate as a House-introduced extenders package includes an extension and wind-down of the popular biodiesel and renewable diesel tax credits. This, coupled with the potential regulatory activity on the “reset,” will restart conversations in Congress about the polarizing program. Stakeholders on all sides of this program should be monitoring this activity for potentials changes. 

For more information on the program, its incentives and its expectations in Washington, D.C. in the coming year, contact Josh Andrews or Brandon Kirkham.  

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