EPA Sends RFS2 Draft Final Rule to White House

Law exempts ethanol produced in facilities built or under construction before Dec. 19, 2007

The Environmental Protection Agency has sent the White House Office of Management and Budget a final rule regarding what biofuels meet the requirements of the renewable fuels standard. The rule would implement the standard which mandates that renewables produce 20 percent fewer greenhouse gas emissions than gasoline, as measured over the fuel's entire life cycle from production to use.

The law exempts ethanol produced in facilities built or under construction before Dec. 19, 2007, meaning much of the ethanol produced now would not be held to that standard for emissions. Margo Oge, director of the EPA Office of Transportation and Air Quality, said previously that this exemption applies to about 15 billion gallons of ethanol production capacity, equal to the maximum amount of ethanol that can meet the renewable fuels standard in 2022.

The Energy Independence and Security Act of 2007 requires the nation's motor fuel supply to include more ethanol and other biofuels each year, reaching 36 billion gallons by 2022. Of that amount, 21 billion gallons must be ethanol produced from biomass or other advanced biofuels.

There are two broad categories of biofuels under the standard: conventional and advanced. Conventional biofuel is essentially corn ethanol. Advanced biofuel is either cellulosic biofuel, or ethanol made from biomass; biomass-based diesel; or a third category, called undifferentiated advanced biofuel. Undifferentiated advanced biofuel can be either cellulosic biofuel, biomass-based diesel or some other type of advanced biofuel that meets the greenhouse gas criteria.

For 2010, the law requires 12.95 billion gallons of renewable fuels, with 100 million gallons from cellulose (see table below). Observers have noted there is not enough cellulosic ethanol to meet the 2010 mandate and believe the EPA will delay the mandate of 100 million gallons, to 2011 or 2012. Corn ethanol installed capacity is around 13.1 billion gallons per year, with about 1.2 billion gallons of capacity idled, according to the Renewable Fuels Association. Expansion projects signal an additional 1.4 billion gallons of supply on the way.

RENEWABLE FUELS STANDARD (in billion gallons)

Calendar

Year

Total

RFS

Corn Eligible

Advanced Biofuels

 

Cellulosic

 

Biodiesel

2008

9.00

9.00

0.00

0.00

0.00

2009

11.10

10.50

0.60

0.00

0.50

2010

12.95

12.00

0.95

0.1

0.65

2011

13.95

12.60

1.35

0.25

0.80

2012

15.20

13.20

2.00

0.50

1.00

2013

16.55

13.80

2.75

1.00

 

2014

18.15

14.40

3.75

1.75

 

2015

20.50

15.00

5.50

3.00

 

2016

22.25

15.00

7.25

4.25

 

2017

24.00

15.00

9.00

5.50

 

2018

26.00

15.00

11.00

7.00

 

2019

28.00

15.00

13.00

8.50

 

2020

30.00

15.00

15.00

10.50

 

2021

33.00

15.00

18.00

13.50

 

2022

36.00

15.00

21.00

16.00

 

The law requires EPA to analyze direct and indirect emissions. EPA included an analysis in its proposed rule saying the use of corn to produce ethanol in the United States would lead to a reduction in corn exports that would encourage farmers in countries like Brazil to destroy tropical rainforests to open more land to food production. This increases emissions, according to the analysis. The ethanol industry countered that corn exports have increased despite rising ethanol production. Ethanol industry representatives said the science underlying the analysis is deficient and unreliable and that EPA would not share the modeling behind it with the public.

House Agriculture Committee Chairman Collin Peterson (D-Minn.) inserted provisions into the House-passed climate-change bill (HR 2454) that would prevent EPA from analyzing international indirect land-use changes resulting from ethanol production.

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