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EPA Issues Proposed Renewable Volume Obligations for 2018

Agency’s RVO proposal for 2018 holds the level for non-advanced biofuels steady at 15 billion gallons.
July 6, 2017

​WASHINGTON – This afternoon, the Environmental Protection Agency (EPA) issued its proposed renewable volume obligations (RVOs) for 2018 under the Renewable Fuel Standard (RFS). In addition, EPA proposed RVOs for biomass-based diesel for 2019.

The EPA’s proposed RVOs and percentage standards for 2018 are listed below. The prior 2015, 2016, and 2017 final volumes and percentage standards are also listed for reference (the previously finalized volumes/percentages are shaded, with newly proposed volumes/percentages are not shaded).

Volumes Used to Determine the Proposed Percentage Standards
2015 2016 2017 2018 2019
Cellulosic biofuel 123 mill gal 230 mill gal 311 mill gal 238 mill gal n/a
Biomass-based diesel 1.73 bill gal 1.90 bill gal 2.0 bill gal 2.1 bill gal 2.1 bill gal
Advanced biofuel 2.88 bill gal 3.61 bill gal 4.28 bill gal 4.24 bill gal n/a
Total renewable fuels 16.93 bill gal 18.11 bill gal 19.28 bill gal 19.24 bill gal n/a

All volumes are ethanol-equivalent, except for biomass-based diesel which is actual.

Proposed Percentage Standards
2015 2016 2017 2018
Cellulosic biofuel 0.069% 0.128% 0.173% 0.131%
Biomass-based diesel 1.49% 1.59% 1.67% 1.74%
Advanced biofuel 1.62% 2.01% 2.38% 2.34%
Total renewable fuels 9.52% 10.10% 10.70% 10.62%

As in years past, EPA is proposing to use its waiver authority to lower the various volumes below their statutory levels. The EPA’s RVO proposal for 2018 holds the level for non-advanced biofuels (generally corn ethanol), steady at 15 billion gallons, the amount required by law. Biomass-based diesel levels for 2018 and 2019 also remain steady at 2.1 billion gallons. Advanced biofuels see a slight decrease from last year’s numbers—dropping to 4.24 billion gallons. Cellulosic biofuels, however, took the biggest hit in the 2018 proposal, dropping from 311 mill gal last year to 238 mill gal this year, far below the 7.0 billion gallons that the Clean Air Act calls for. EPA notes that “renewable fuels will continue to play a critical role as a complement to our petroleum-based fuels,” but that “real-world challenges…have slowed progress towards meeting Congressional goals.”

The Agency has also solicited comments on whether and how the current Renewable Identification Number (RIN) trading structure “provides an opportunity for market manipulation,” and how changes to that system might fix such concerns. In addition, EPA will begin a technical analysis on whether it should engage in the “reset” procedure, a process whereby EPA could, under the Clean Air Act, “reset” the statutory volume targets presuming certain conditions are met.

While EPA’s proposal requests comments on the RVO levels, it makes clear that it is not soliciting comments on all aspects of the RFS program. Specifically, EPA notes that it is not requesting comments on the definition of “obligated party.” As such, the point of obligation will remain where it has correctly been set—on refiners and importers, and not downstream entities.

For more on the EPA’s proposal, click here. Comments will be due 45 days after publication in the Federal Register.