NCC filed comments Thursday in response to an EPA notice on the consideration of reducing renewable energy production requirements in 2018. NCC’s comments can be viewed here.
EPA requested further comment on October 4 regarding reducing requirements under the Renewable Fuel Standard Program. “EPA remains concerned about the high cost of advanced biofuels,” EPA said it its Notice of Data Availability. “…we believe it is appropriate to request further comment on appropriate ways to determine the applicable volume requirements for 2018, and the biomass-based diesel volume requirements for 2019.”
The RFS is ultimately composed of two categories of renewable fuel: advanced biofuels and conventional biofuels, the latter of which accounts for 15 billion annual gallons of 19.24 billion gallons in the entire program, according to EPA’s proposed 2018 volume requirements. Nested within the advanced biofuels category are three subcategories: biomass-based diesel, cellulosic biofuel and undifferentiated advanced biofuels.
NCC cited the expected lower supply of biomass-based diesel due to newly announced subsidies from two large renewable fuel exporters to the U.S.: Argentina and Indonesia. Both nations are designating subsidies ranging from over 40 to nearly 70 percent on exports to the U.S. In 2016, imports from Argentina alone supplied 18 percent of the physical gallons of advanced and renewable biodiesel supply.
In response to the lower expected supply, NCC requested EPA issue a waiver lowering production volume requirements for biomass-based diesel. Since domestic production of biomass-based diesel under the RFS since 2013 has increased 29 percent, and imports have increased 136 percent, a reduction in expected imports should be matched by a commensurate reduction in overall targets, with domestic production increases filling a larger percentage of overall production. This reasoning, NCC argues, ensures U.S. energy independence and security in response to such foreign subsidies.
“Reducing the biodiesel category, as is demonstrated above to be necessary, should also require a reduction in the total renewable category,” NCC’s comments read.
EPA also proposed allowing ethanol exports to count towards a producer’s renewable volume obligation, a proposal which NCC is opposing. “By allowing ethanol exports to generate RINs (renewable identification numbers, a measure of a given producer’s compliance) of any value, exports would be subsidized and therefore encouraged,” NCC’s petition states. “This would be harmful to other unsubsidized corn users and not in keeping with the intent of the statute.”
EPA Administrator Scott Pruitt sent a letter late Thursday to a group of seven senators concerned with EPA’s proposed reduction. The letter stated EPA’s intent to discard the proposal allowing ethanol exports to count for credit. It also noted that a decision will be finalized “within 30 days” not to move the point of obligation downstream to fuel wholesalers, committed to finalize biofuel volumes by November 30 at levels equal to or greater than those in the proposed rule, committed EPA staff to “actively explore” whether the agency has legal authority to grant a waiver allowing year-round sale of gasoline with 15 percent ethanol. The letter can be viewed here.
