Renewable Fuel Standard (RFS)
Last Updated: March 31, 2022
The Renewable Fuel Standard (RFS) mandates increasing volumes of renewable fuels in the fuel pool each year. The Environmental Protection Agency (EPA) is responsible for establishing and implementing regulations to ensure that the nation’s transportation fuel supply contains the mandated biofuels volumes. However, the volumes required can vary from statutory targets. This happens when EPA exercises its “waiver” authority when certain criteria are met. The EPA is supposed to finalize the obligated volumes of renewable fuels for a particular year by November of the year before. After the statutory targets go away in 2022, EPA will have the authority and discretion to determine the volume of renewable fuel for each subsequent year. With the looming sunset of statutorily mandated blending targets this year, EPA, lawmakers, and fuels industry stakeholders are considering the future of the RFS program post-2022.
The convenience and fuel retailing industry sells over 80% of the motor fuels in the United States. Policies that affect motor fuels – what and how to sell, store, label, dispense, price and tax fuel – can have a dramatic impact on the industry.
In the past, NACS has supported EPA’s use of its waiver authority under the RFS to avoid hitting the blend wall - ensuring that future volume obligations do not exceed the volume of renewable fuel that the market can reasonably absorb or ensuring that there is sufficient renewable identification numbers (RINs) to fulfill obligated parties’ renewable volume obligations. NACS believes that EPA has used its waiver authority appropriately during the annual renewable volume obligation process. However, NACS has been concerned with delays on finalizing the renewable volume obligations.
If Congress moves legislation, NACS supports including language to provide liability relief to fuel retailers on consumer mis-fueling. A fuel retailer should not be responsible for a customer dispensing the wrong fuel in his vehicle when the vehicle and the gas pump has been appropriately labeled. Legislation should also eliminate barriers to selling legal fuels (e.g. RVP one-pound waiver for blends of ethanol greater than E10). In addition, the point of obligation should remain with the manufacturer or importer of the fuel and not moved to the blender and more transparency and clarity should be added to the small refiner exemption process.
While there is recognition that the RFS program needs to be updated in light of the pending sunset of statutorily mandated volumes of renewable fuel, to date, Congress has only held hearings as it does each year to review the program. EPA is internally determining its process on how to move forward beyond 2022. NACS continues to work with stakeholders, lawmakers and regulators in representing the fuel retailing perspective on the RFS program as a whole, and as individual issues within the program develop.