EPA releases 2011 RFS2 volume requirements

By Erin Voegele | November 17, 2010
Posted Nov. 30, 2010

The U.S. EPA has released final 2011 volume requirements for the renewable fuel standard, RFS2. While the agency reduced the volume requirement for cellulosic biofuel due to low production estimates, the standard for advanced biofuel has been maintained at the statuary level of 1.35 billion gallons. According to the EPA, the standard for advanced biofuel is able to be maintained because the agency believes that production of other advanced biofuels, such as biodiesel, renewable diesel, and sugarcane ethanol, will be sufficient to fill the gap caused by the disconnect between the statuary requirements for cellulosic biofuel and the actual volume of the fuel that is expected to be produced.

The 2011 volume percentages for RFS2's four nested pools are:

- Cellulosic biofuel-6.6 million gallons (6.0 million gallons of ethanol equivalent volume)
- Biomass-based diesel-0.80 billion gallons (1.20 billion gallons of ethanol equivalent volume)
- Advanced biofuel-1.35 billion gallons (1.35 billion gallons of ethanol equivalent volume)
- Renewable fuel-13.95 billion gallons (13.95 billion gallons of ethanol equivalent volume)

These volumes represent the minimum amount of renewable fuels that must be consumed in the U.S. during 2011. According to the EPA, volumes of cellulosic biofuel or biomass-based diesel consumed above and beyond these requirements will count towards the advanced biofuel and total renewable fuel volume requirements. Together, the four categorical standards ensure that approximately 8 percent of all fuel used within the U.S. next year will be renewable.

Although biodiesel production appears to have been significantly affected by the expiration of the biodiesel tax credit and E.U biodiesel tariff, the EPA said in the final rule that U.S. biodiesel producers have produced higher volumes in times when it was economic to do so, which leads the agency to believe the industry is capable of producing higher volumes of fuel in the future under appropriate economic circumstances. In fact, the rule states that the agency has found that only 52 U.S biodiesel plants, representing a production capacity of 600 million gallons, have been idled. While ramping up production will require time and reinvestment, the EPA states that feedback from the industry has made it confident that that ramp-up can occur in time to meet a production goal of 800 million gallons.

"The U.S. biodiesel industry is pleased that the EPA has issued the final 2011 RFS2 volume requirements," said Manning Feraci, the NBB's Vice President of Federal Affairs. "There are significant job creation, energy security and environmental benefits associated with expanded biodiesel use. Today's rulemaking-in particular the requirement to use 800 million gallons of biomass-based diesel in the domestic fuels marketplace-will allow America to reap these benefits…The U.S. biodiesel industry stands ready to provide the fuel that will be needed to meet the readily attainable biomass-based diesel goals established in RFS2. We look forward to working with all industry stakeholders to successfully implement this worthwhile program."

In addition to setting volume requirements for 2011, the EPA's rulemaking also included several administrative announcements and RFS2 regulation changes. The final rule released by the agency has modified the provision for "delayed RINs" by making it more broadly applicable to any biofuel production pathway so long as the biofuel was in commercial production on July 1, 2010, the agency receives the appropriate fuel pathway petition by Jan. 31, 2011, and determines the fuel pathway provides for greenhouse gas reductions required by the Energy Independence and Security Act of 2007. The final rule has also established criteria for the EPA to use in determining petition approvals for foreign-growth feedstocks, set the price for cellulosic biofuel waiver credits, and announces the results of EPA's annual assessment of the aggregate compliance approach for U.S. crops and crop residue.

A full copy of the EPA's rule, titled "Regulation of Fuels and Fuel Additives: 2011 Renewable Fuel Standards," can be downloaded from the agency's website.
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