Final 2017-'18 RFS rule: Advanced biofuel RVO grows at 19 percent

By Ron Kotrba | November 23, 2016

The U.S. EPA released its final rule for renewable volume obligations (RVO) under the renewable fuel standard (RFS) Nov. 23, and the figures for the 2018 biomass-based diesel category are what was proposed in May at 2.1 billion gallons, up 100 million gallons from 2017.

The agency also issued its advanced biofuel RVO for 2017, which was higher than the proposal of 4 billion ethanol-equivalent gallons (2.67 billion biodiesel-equivalent gallons) at 4.28 billion ethanol-equivalent gallons (2.85 billion biodiesel gallons). The 2016 advanced biofuel RVO was 3.61 billion ethanol-equivalent gallons (2.41 billion biodiesel gallons).

The 2017 advanced biofuel RVO represents nearly a 19 percent growth in one year, and a 7 percent increase from the 2017 proposal issued in May. Biomass-based diesels such as biodiesel and renewable diesel will continue filling most of the advanced biofuel volumes, as biomass-based diesel is a subset of the overall advanced biofuel category.

“We think it’s very encouraging movement overall, particularly on the advanced biofuel part of the program,” Gene Gebolys, founder, president and CEO of World Energy, a major U.S. biodiesel producer with four production facilities, told Biodiesel Magazine. Gebolys is also chair of the National Biodiesel Board’s RFS Working Group, which helps supply EPA with suggested volumes the industry can achieve, and data to buttress its positions. “Clearly it’s nowhere near what we as an industry have for capacity,” Gebolys added, “but the fact that EPA moved the advanced biofuel RVO from 4 billion in the proposal to 4.28 billion gallons in the final rule, well, it’s heartening they listened to us. But there’s a lot more room for growth.”

Janet McCabe, the EPA’s acting assistant administrator for the office of air and radiation, said, “Renewable fuel volumes continue to increase across the board compared to 2016 levels. These final standards will boost production, providing for ambitious yet achievable growth of biofuels in the transportation sector. By implementing the program enacted by Congress, we are expanding the nation’s renewable fuels sector while reducing our reliance on imported oil.”

The National Biodiesel Board welcomed the release of the new standards and said the final rule strengthens America’s energy security.

“The real winners with this announcement are American consumers who will now have access to even more cleaner-burning, advanced biofuel,” said NBB CEO Donnell Rehagen. “These benefits extend far beyond the biodiesel industry, supporting high-paying jobs and clean air across the nation. Though we are poised to top these numbers this year, growth in advanced biofuels still sends positive signals to the marketplace.”

NBB said while the new standards reflect modest growth, they remain below the more than 2.6 billion gallons of biodiesel and renewable diesel expected in 2016.

“While NBB applauds the increased volumes, there is room for more aggressive growth,” Rehagen said. “The U.S. biodiesel industry can do more. The production capacity and feedstock are clearly available as the market is already topping these levels. We will work with the incoming administration to help them understand the benefits provided by our growing domestic biodiesel industry and the potential to support additional jobs and investment in rural economies.”

Gebolys said what has been gleaned from this past election and Trump’s victory is that rural America was a huge player in this election cycle, which he said bodes well for conversion of the $1 per gallon biodiesel blenders credit to a domestic producers credit. “While I don’t think it’s likely to pass before Jan. 1, I do think it is likely to pass as a producers credit retroactively to Jan. 1,” he said. “After talking with high-level officials on both sides of the aisle, I feel good about that happening.”

Daniel J. Oh, president and CEO of the largest U.S. biodiesel producer, Renewable Energy Group Inc., said of the news, “While our industry has shown that higher volumes of biomass-based diesel can and will be produced and consumed, this final rule elevates the growth trajectory for our cleaner, lower carbon intensity advanced biofuel. Biomass-based diesel will continue to lead the way. We appreciate the support of those at the EPA, many others throughout the administration and our bipartisan champions on Capitol Hill who all helped make this possible.”

Grant Kimberley, executive director of the Iowa Biodiesel Board, said, “We’re pleased to see the volumes of biodiesel continue to grow under the RFS. We are especially encouraged by the strong increase in the advanced biofuels category, which is an area where biodiesel can grow and compete. This is critical in light of the foreign-produced biodiesel we’ve seen from places like Argentina and Southeast Asia, and sugarcane ethanol from Brazil.” Kimberley added that the RFS is one of the most successful bipartisan energy policies ever to facilitate job growth and diversification of our nation’s energy supply. “Our state’s producers are thankful to have more market certainty with a timely announcement for 2018 requirements,” he said. 

For the rest of the RVOs in EPA’s final RFS rule, cellulosic biofuel for 2017 is finalized at 311 million gallons, 35 percent higher than the 2016 standard. The conventional biofuel RVO for 2017 is also up from the proposal, set at 15 billion gallons compared to the 14.8 billion gallons proposed in May. Total renewable fuels under the RFS for 2017 come in at 19.28 billion gallons, up from the 2016 standards of 18.11 billion gallons. 


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