EPA Boosts RFS Volumes, Industry Concerned About More Refinery Waivers

EPA released 2019 volume requirements for the Renewable Fuels Standard. ( MGN Image )

EPA released target volumes for the Renewable Fuel Standard (RFS) program for 2019 as anticipated, earlier Friday, holding conventional volumes at 15 billion gallons, but boosting targets for advanced biofuels, cellulosic and biodiesel. The annual RFS volumes set the amount of various biofuels that must be used for transportation fuel in a given calendar year. The 2019 targets call for use of 19.92 billion gallons of all groups of biofuels next year.

The announced targets were immediately criticized by renewable fuels groups, not over the target levels themselves, but because EPA did not place any limits on small refiner waivers which could dramatically decrease the effective target levels.

“While we are pleased that EPA finalized the statutory 15-billion-gallon requirement for conventional renewable fuels and modest increases to the cellulosic and advanced biofuel categories, we note that EPA did not prospectively account for any small refiner exemptions that it expects to issue in 2019,” said Renewable Fuels Association (RFA) CEO Geoff Cooper in a press release. “Hopefully, that means EPA is not intending to issue any small refiner waivers at all in 2019 because it knows there is no rationale or basis for doing so.”

The waivers are intended to exempt certain small refiners who might be financially challenged to meet the blending requirements of the RFS, but those waivers saw a dramatic increase in the past two years. While only a handful of waivers were issued by EPA initially, that number grew to nearly 50 during the Trump administration according to RFA, including waivers for oil companies Chevron and Andeavor.

EPA raised the biodiesel target volume by 330 million gallons over 2019, but the National Biodiesel Board (NBB) said the target is still below the level already being produced by the biodiesel industry.

“EPA recognizes that the biodiesel and renewable diesel industry is producing fuel well above the annual volumes,” noted NBB CEO Donnell Rehagan in a statement. “The industry regularly fills 90 percent of the annual advanced biofuel requirement. Nevertheless, the agency continues to use its maximum waiver authority to set advanced biofuel requirements below attainable levels. The method is inconsistent with the RFS program’s purpose, which is to drive growth in production and use of advanced biofuels such as biodiesel.”

Outspoken biofuel supporter Senator Chuck Grassley (R-IA) echoed concerns about the continued hardship waivers for refiners, but sounded an optimistic tone on resolving the issue with EPA.

“After a meeting with Acting Administrator Wheeler yesterday, I’m optimistic about the potential for a revisiting of this practice,” Grassley said. “It would be long overdue and show that the Trump administration and Acting Administrator Wheeler care about righting the ship at EPA after the prior administrator’s mismanagement and poor leadership. The handling of these applications is ripe for review. There’s no good reason oil companies making billions of dollars in profits should be exempted from following the law as passed and intended by Congress.”