NACS Comments on Annual RFS Obligations

The association supports the proposed RVOs but stresses that biofuels obligations must be set to avoid the blend wall.

February 08, 2022


ALEXANDRIA, Va.—NACS has submitted comments to the Environmental Protection Agency (EPA) on the annual Renewable Fuel Standard (RFS) renewable volume obligations (RVOs) for 2020, 2021 and 2022.

Last Friday, the public comment period closed for the EPA’s rulemaking on the RFS Annual Rules and its proposed annual RVOs for 2020, 2021 and 2022.

Each year under the Clean Air Act, the EPA must calculate and promulgate RVOs that ensure the program’s requirements are met in the coming year. The deadline to finalize the renewable obligations each year is on Nov. 30. In separate rulemakings, EPA had previously extended the 2019 compliance deadline for small refineries and the 2020 compliance deadline.

“The proposed extensions (both for 2019-2021 and for 2022+) will help ensure that obligated parties are positioned to fully comply with their RFS obligations by ensuring that each year’s compliance deadline falls after the standards for the subsequent compliance year are known,” wrote the EPA.

In the latest rulemaking, NACS shared that it generally supported the proposed RVOs and acknowledged that the EPA had appropriately considered the actual amount of biofuels available to the marketplace and adjusted the blending levels accordingly. As in past comments, NACS reiterated that the biofuels obligations must be set so that they can reasonably be absorbed and consumed by the market and avoid hitting the “blend wall.”

“Setting the RVOs above the level that can reasonably be absorbed and consumed by the market would be counterproductive to a successful RFS program and would result in significant market disruptions and higher prices for consumers,” writes NACS.

In addition, NACS shared that EPA had rightly considered the dramatic decline in demand for fuel in 2020 due to the coronavirus pandemic.

However, NACS expressed concern over the impact of the small refinery exemption process under the RFS, and that more can be done by the EPA to improve transparency.

“NACS urges the agency to identify: (1) the standard for obtaining a waiver and the factors used to evaluate applications; and (2) the recipients of the waivers and the volumes of renewable obligations that have been waived for that recipient,” wrote NACS.

NACS also said that it’s concerned with how the RFS program will be implemented beyond the 2022 statutory volumes.

“The last time Congress revised the RFS was in 2007. Those revisions were premised upon an expectation of (1) a rise in demand for gasoline and (2) widespread availability of cellulosic ethanol by 2013. As the agency itself has acknowledged, neither of those expectations have been met,” writes NACS.

NACS writes that it supports the EPA’s proposal to use its cellulosic waiver authority, so it can reduce the applicable volume of cellulosic biofuel if the projected production volume is less than the minimum applicable statutory volume. This would correspondingly lower the applicable volume of renewable fuel and advanced biofuels, bringing the RVOs in line with what it projects that the market could reasonably absorb.