On November 30, 2017, US EPA issued the final volume requirements and associated percentage standards for its renewable fuel standards (RFS) program for calendar year 2018, as well as the biomass-based diesel volume requirement for 2019. The annual volumes establish quotas for how much renewable fuel must be added to gasoline and diesel in order to, over time, replace or reduce the overall use of petroleum-based fuel. The final volumes for 2018 represent little change from the volume requirements adopted in 2017.
That the US EPA largely maintained 2017 levels was viewed by some as a success for the renewable fuel industry, as the new administration seriously considered reducing biofuel quotas. In fact, a proposed rule published in July 2017 relied on US EPA’s statutory waiver authority to set 2018 requirements below the statutory minimum and lower than those for 2017.
Although US EPA did not lower volume requirements, leaders in the renewable fuel industry complained that keeping the quotas flat will harm the industry. Daniel Whitehead, Chief Operating Officer of the National Biodiesel Board, explained:
EPA Administrator Pruitt has disappointed the biodiesel industry for failing to respond to our repeated calls for growth. These flat volumes will harm Americans across several job-creating sectors—be they farmers, grease collectors, crushers, biodiesel producers or truckers—as well as consumers. . . . We’ll continue to work with the administration to right this wrong for future volumes.
Also dissatisfied with the final RFS volumes, Iowa Governor Kim Reynolds stated, by not raising the RFS levels, “the EPA is discouraging investment and discouraging growth. That’s the opposite of what the Renewable Fuel Standard is designed to achieve.”
The petroleum industry was similarly disappointed by the RFS volumes, and US EPA’s failure to repair a failed program. CEO of the American Fuel & Petrochemical Manufacturers, Chet Thompson, responded to the announcement of the 2018 quotas, saying EPA “bow[ed] the knee to King Corn.” He explained, “We think this action is bad for U.S. manufacturing and American consumers and encourages Congress to finally fix the RFS.”
Both sides of the renewable fuel debate are displeased with US EPA’s decision to keep RFS volumes flat. However, the 2018 volumes give no indication regarding US EPA’s future plans for the RFS program. Next year’s volumes for 2019 may show whether US EPA will keep volumes static long term or move forward with another proposal to reduce quotas.