Ethanol Blog

STREATOR, Ill. (DTN) -- The Environmental Protection Agency on Nov. 15, released the long-awaited proposed 2014 volume mandates for obligated parties under the Renewable Fuel Standard, which includes a reduction in the overall mandate to 15.21 billion gallons from volumes set by statute at 18.15 billion.

EPA said the proposal seeks to put the RFS program "on a steady path forward -- ensuring the continued long-term growth of the renewable fuel industry -- while seeking input on different approaches to address the E10 blend wall."

Nearly all gasoline sold in the U.S. is now E10, which is fuel with up to 10% ethanol.

The proposal cuts the nested RFS category primarily satisfied with the corn-based ethanol to roughly 13 billion gallons, down from 14.4 billion gallons set by statute, in an effort to avoid the ethanol blend wall -- the saturation point for ethanol in the gasoline pool based on current gasoline standards and consumer preference.

"Production of renewable fuels has been growing rapidly in recent years, EPA said. "At the same time, advances in vehicle fuel economy and other economic factors have pushed gasoline consumption far lower than what was expected when Congress passed the Renewable Fuel Standard in 2007," resulting in reaching the 10% blend wall.

"If gasoline demand continues to decline, as currently forecast, continuing growth in the use of ethanol will require greater use of higher ethanol blends such as E15 and E85."

Volumes proposed for 2014 are 17 million gallons of cellulosic biofuel, 1.27 billion gallons of biomass-based diesel, 2.2 billion gallons of advanced biofuel, with the total RFS at 15.21 billion gallons.

The proposal includes volume ranges within each category as follows: cellulosic, 8 million to 30 million gallons; biomass-based diesel remaining at 1.28 billion gallon; advanced biofuels at 2.0 billion to 2.51 billion gallons and renewable fuel total at 15.0 billion to 15.52 billion gallons.

EPA is seeking comment on the total volumes and expects to have a final rule in the first quarter of 2014.

Final RVOs are by law to be finished by the end of November prior to the compliance year.

The RFS targets steadily increases to an overall level of 36 billion gallons in 2022. To achieve these volumes, EPA calculates a percentage-based standard for the following year.

Each obligated party -- refiners, blenders and importers -- must determine the minimum volume of renewable fuel that it must blend or offset by purchasing a compliance credit based on the volume of petroleum produced, blended or imported into road transportation fuel.

(AG)

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