The Environmental Protection Agency proposed raising the volumes of ethanol and biodiesel in the nation’s fuel supply to new highs in 2023 and subsequent years, reflecting President Joe Biden’s support for renewable transportation fuels.
The EPA’s proposal represents a big win for the corn lobby and other biofuel groups, which have sought ever-larger renewable fuel blending obligations, and a setback for refiners, who want Biden to cut them slack on their obligations under the Renewable Fuel Standard.
The proposal announced Thursday represents the total volume of biofuels that refiners must acquire and blend into retail fuel under the RFS for a given compliance year, known as the renewable volume obligation. The proposed 2023 RVO is 20.82 billion gallons, an increase from 2022’s finalized volume of 20.63 billion gallons.
RVOs would then grow to 21.87 billion gallons in 2024 and 22.68 billion gallons in 2025, according to the proposal, which is set to be finalized next summer.
This proposed RVO also marks a major change in the administration of the RFS. The EPA’s previous RVOs were based on statutory targets set by Congress, but those targets expired with compliance year 2022.
The EPA is now required to coordinate with the Department of Energy and set RVOs through a rule-making process without specific targets from Congress.
The EPA has frequently missed its statutory deadlines for proposing and finalizing renewable fuel volume requirements, frustrating the biofuel industry.
The announcement Thursday was made pursuant to a consent decree the agency entered into in July with Growth Energy, a renewable fuels trade group, requiring the proposed standard to be announced by Nov. 16. The two parties recently agreed to extend the deadline to Wednesday, Nov. 30.
The RFS is a divisive political issue, with corn growers who are concentrated largely in Midwestern states such as Iowa and Nebraska and their representatives in Congress being major supporters of larger blending obligations.
Refinery interests, represented most prominently by the American Fuel and Petrochemical Manufacturers, generally oppose policies favoring the expansion of renewable fuels, arguing that meeting blending obligations makes retail fuel more expensive.
The Fueling American Jobs Coalition, another industry group representing union workers and independent oil refiners, has been running advertisements in recent months calling on the Biden administration to reform the Renewable Fuel Standard. Some ads aired during the World Series in October.
Biden has been supportive of renewable fuels, including by directing the EPA to waive restrictions to make E15, a blended gasoline with a higher percentage of ethanol than the commonly found E10, more widely available through the summer months.