The Environmental Protection Agency (EPA) this week announced final blending requirements under the Renewable Fuel Standard (RFS) that increase the amount of ethanol that must be blended with gasoline for CY2022.

The announcement listed 2022 volumes at 20.63 billion gallons of renewable fuel across corn ethanol, cellulosic and advanced biofuels, and biodiesel. That number is down slightly from what the EPA forecasted its 2022 obligations would be back in December 2021. The 20.63 billion gallon requirement includes 5.63 billion gallons of advanced biofuels and 15 billion gallons of conventional corn ethanol, which is mandated by the RFS statute.

EPA also extended the timeline for compliance with 2020 RFS blending obligations.

The EPA in December 2021 proposed revised, retroactive RVOs for 2020, 2021, and 2022. The agency also proposed to deny all pending exemptions to the RFS blending requirements.

In its December 2021 proposal, EPA retroactively revised its 2020 RVOs to 510 million gallons for cellulosic biofuel, 2.43 billion gallons for biomass-based diesel, 4.63 billion gallons for total advanced biofuels, and 17.13 billion gallons for total renewable fuels. This implied that the conventional corn ethanol mandate would have been set at 12.5 billion gallons, or 2.5 billion gallons lower than the RFS requires in the statute and the level that has been required in previous years.

EPA in December 2021 also proposed to retroactively revise 2021 RVOs to 620 million gallons for cellulosic biofuel, 2.43 billion gallons for biomass-based diesel, 5.2 billion gallons for total advanced biofuels, and 18.52 billion gallons for total renewable fuels. This implied that the conventional corn ethanol mandate will be set at 13.32 billion gallons, or 1.68 billion gallons lower than the RFS requires in the statute and the level that has been required in previous years.

For 2022, EPA in December 2021 proposed RVOs for 2022 at 770 million gallons for cellulosic biofuel, 2.76 billion gallons for biomass-based diesel, 5.77 billion gallons for total advanced biofuels, and 20.77 billion gallons for total renewable fuels. This implied that the conventional corn ethanol mandate will be set back at 15 billion gallons, or the limit that the RFS requires in the statute and the level that has been required in previous years.

This week’s announcement is in line with what EPA predicted in December with regards to 2022 blending levels for corn ethanol, which is the 15 billion gallon statutory limit.

Conventional corn ethanol blending obligations are implied by subtracting total advanced biofuels from the total renewable fuel blending obligation.

Due to EPA’s past decisions to grant Small Refinery Exemptions (SREs), the 15 billion gallon conventional corn ethanol mandate has not been met in recent years. SREs exempt some refineries from their blending obligations, thus lowering total corn ethanol output.

EPA’s December proposal on the RVOs can be found here. The proposal on the SREs can be found here. EPA’s final determination announced this week can be found here.

 

 

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