NACS Comments on EPA’s RFS, eRIN Proposed Rule

The draft rule is a “missed opportunity” for the EPA to leverage the RFS for carbon reduction.

February 14, 2023

ALEXANDRIA, Va.—NACS, along with NATSO and SIGMA, submitted comments in response to the Environmental Protection Agency’s (EPA) proposed renewable volume obligations (RVOs) under the Renewable Fuel Standard (RFS) program. The groups also commented on the EPA’s proposal to allow electric vehicles to be eligible for renewable fuel credits, or eRINs.

The EPA’s proposal on RVOs includes volume targets for 2023, 2024 and 2025 in all four categories of renewable fuel and a supplemental standard for 2023 to address the remand of the 2016 annual rules by the D.C. Circuit Court of Appeals.

The draft rule also proposes several regulatory changes to the RFS program, including regulations governing the generation of qualifying renewable electricity and other modifications intended to improve the program’s implementation.

“Although the Proposed Rule will result in meaningful emissions reductions, it represents a missed opportunity to signal unambiguously that EPA will leverage the RFS to encourage fuel marketers and retailers—as well as other market participants—to invest in the most environmentally attractive alternative fuel technologies,” wrote the groups in a letter to the EPA.

The groups write that the proposed rule “offers a series of substantively flimsy rationales for incentivizing less environmentally attractive fuels at the expense of the lowest carbon advanced biofuels that the Program should prioritize.”

Regarding the EPA’s eRIN proposal, the groups believe the construct of the renewable fuel credits have a “disproportionate concern with the Agency’s professed bandwidth limitations at the expense of maximizing the Program’s capacity for incentivizing investments in electrifying the transportation sector.”

The groups offer three suggestions to refine the EPA’s proposals:

  1. Increasing the total advanced mandate by at least an additional 250-350 million gallons for each year in order to accommodate the additional renewable diesel that will be introduced into commerce.
  2. Clarifying that any ethanol blending above projected levels will result in a concomitant increase in the total advanced category.
  3. Changing the proposed eRIN regime such that eRINs are generated by publicly accessible charging station owners and operators rather than original equipment manufacturers (“OEMs” or “automakers”). In the alternative, the Agency should establish a “carve-out” to enable charging station owners (in addition to OEMs) to generate eRINs. The economics of installing and operating charging stations are exceedingly challenging; eRINs offer an opportunity for EPA to establish a clearer pathway to profitability for charging station investments.

“Fuel retailers and marketers are more successful when they are able to optimize low carbon fuels and seamlessly integrate those fuels into the fuel supply,” wrote the groups. “The Associations’ members have a proven history of responding to policy signals—including the RFS—with strategic investments that improve transportation energy’s environmental attributes, enhance America’s energy security, and minimize consumer costs.”