Continued Abuse of Small Refiner Waivers Renders Proposed 2019 RFS Volumes ‘Meaningless,’ RFA Tells EPA

Dan Energy, Industry News Release

In comments submitted to the Environmental Protection Agency (EPA) on its proposed 2019 Renewable Fuel Standard (RFS) renewable volume obligations (RVOs), the Renewable Fuels Association (RFA) said it is “greatly concerned that continued abuse of small refinery exemptions will render the proposed volumes meaningless.” RFA urged the agency to account for small refinery exemptions prospectively when it calculates the RVO percentage, as required by the statute.

volumesIn late June, EPA proposed a total renewable fuel volume of 19.88 billion gallons (BG), of which 4.88 BG is advanced biofuel, including 381 million gallons of cellulosic biofuel. That leaves, on paper, a 15 BG requirement for conventional renewable fuels like corn ethanol.

“Issuing small refiner exemptions after the RVO rule is finalized—as EPA did for the 2016 and 2017 RVO rules and appears poised to do for the 2018 RVO—has the practical impact of reducing the actual required blending volumes to levels below those specified in the final rule. Thus, we do not consider the volumes that appear in the proposed rule to be authentic, meaning the preamble’s analyses of the impacts of the 2019 proposed volumes are flawed and indefensible,” RFA President and CEO Bob Dinneen wrote in comments to EPA Acting Administrator Andrew Wheeler.

EPA can “ensure that the RVOs are administered in a manner that is consistent with the statutory purpose of the program” by accounting for the small refiner waivers prospectively, Dinneen noted. In fact, EPA acknowledged it has the authority and obligation to do so, Dinneen explained. “In a draft of the proposed rule that was submitted to the White House Office of Management and Budget for inter-agency review, EPA properly included projections of exempted volumes of gasoline and diesel from small refineries. The effect of including these exemptions in the RVO calculation is to increase the RVO percentage for remaining obligated parties, ensuring that the statutorily specified volumes of renewable fuel are in fact blended with gasoline and diesel. However, the administrative record shows that just days before the proposed rule was made public, EPA inexplicably deleted the provisions that would have effectively reallocated the projected small refiner exemptions,” he wrote.

“RFA’s strongly held position is that EPA’s final rule must account for projected small refinery exemptions in calculating the 2019 RVO percentages. The agency has already shown it knows how to do so and has explained why accounting for projected exemptions best meets the statutory intent of the RFS,” Dinneen wrote in his comments.

Additionally, RFA urged EPA to comply with the D.C. Circuit Court’s mandate to reallocate the 500 million gallons of conventional renewable fuel that were missing from the 2016 RVO, due to EPA’s illegal application of its general waiver authority.

To view a full copy of RFA’s comments, click here.

Source: Renewable Fuels Association