EPA Announces 2013 RFS2 Final Rulemaking

EPA Announces 2013 RFS2 Final Rulemaking
The EPA has announced the final rules for the Renewable Fuel Standard, which reduces the cellulosic mandate and extends the compliance period.

"This week, the EPA released final rules for the Renewable Fuel Standard in 2013 (summary fact sheet here). These rules establish the volume requirements and associated percentage standards used to enforce RFS2 compliance by obligated parties. The final rules differ from those in the proposed rulemaking released earlier in the year in that the 2013 cellulosic mandate is written down to just 6 million (compared with 14 million gallons in the proposed rules and 1 billion gallons in the original law). In addition, the end of the 2013 compliance period was extended from February 28 to June 30, 2014. The total advanced and renewable mandates remain at the levels originally outlined in the RFS - 2.75 billion gallons of advanced (which includes the 6 million gallons of cellulosic and 1.28 billion volumetric gallons of biodiesel) and 16.55 gallons of total renewable fuel (which includes the 2.75 billion gallons of advanced and 13.8 billion gallons of renewable biofuels). Finally, the final rulemaking includes discussion which looks ahead to next year, stating that the advanced and renewable mandates for 2014 could be adjusted to address E10 blendwall related challenges.
In the proposed RFS rules for 2013, EPA initially lowered the cellulosic mandate from 1 billion to 14 million gallons, citing the lack of industry production capacity to meet the original mandate level. The final rule further reduced the cellulosic mandate down to 6 million gallons based on estimates of potential cellulosic production from two existing commercial scale plants currently producing cellulosic biofuels, and two additional plants which are under construction but not projecting any production until 2014. The two existing plants, located in Florida and Mississippi, have production capacity estimated at up to 19 million gallons (ethanol equivalent) per year, but projected 2013 production around 6 million gallons. The plants under construction, located in Kansas and Iowa, have annual capacities totaling 30 million gallons. Therefore, total domestic cellulosic production capacity could be as high as 49 million gallons for 2014.
Despite a further reduction in the cellulosic mandate component, the EPA decided to leave the total advanced and renewable mandate levels unchanged for 2013. Of the 2.75 billion advanced gallons, 1.28 billion must come from biomass-based diesel (D4 RINs) along with the 6 million gallons of cellulosic (D3) RINs. After adjusting the volumetric biodiesel to ethanol equivalent gallons (1.28*1.5 = 1.92 billion gallons), this leaves an undifferentiated gap of 824 million gallons which could be filled with other advanced fuels (D5 RINs) such as sugar-cane ethanol or with additional gallons of biodiesel.
The EPA also left the total renewable mandate for 2013 at 16.55 billion gallons, meaning that 13.8 billion gallons (16.55 total less 2.75 advanced) of renewable biofuel (D6 RINs) will be needed. As with the undifferentiated advanced portion, this renewable portion of the mandate could be met with RINs from any type of advanced biofuel (i.e. D3, D4, or D5 RINs) in addition to the D6 RINs generated from corn-based ethanol. Table 1 reports original, proposed, and final mandate volumes for 2013 along with the resulting final percentage standards which obligated parties must meet to be in compliance."

Read the full article at Farm Doc Daily, produced by the Department of Agriculture and Consumer Economics, University of Illinois