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ResourceWise: Jul 16, '24
Doubts persist that the Environmental Protection Agency (EPA) will roll out the 2026 Renewable Fuel Standard (RFS) volumes within this year's timeline. These worries stem from multiple firms within the biomass-based diesel industry and other related sectors.
Nine trade associations have appealed to Michael Regan, EPA Administrator, about their collective concerns. They represent agents from biofuel production organizations, feedstock processing and production companies, and customers within the low-carbon sector.
The coalition calls for more robust 2026 Renewable Fuel Standard (RFS) volumes formally set by November, the statutory deadline.
Low EPA Volumes Lead to Biofuel and Feedstock Production Shut Downs
Their letter points out a steep fall in RFS compliance credit values. This drop directly connects to the EPA's excessively low 2023 to 2025 volumes set last year. As a result, multiple biofuel and feedstock production facilities have shut down.
Investments in feedstock processing capacity are in danger. Current levels also threaten the production of sustainable aviation fuel.
Current Mandates Not Set to Scale, Slowing Renewables Growth
Biofuel and feedstock producers are feeling the pinch of the minimal mandates set for 2023-2025.
The White House has reportedly not directed the EPA to propose a 2026 rule yet. And a policy shift from the Biden administration is improbable considering the upcoming electoral season.
The trade associations have urged the EPA to finalize the 2026 rule by November. Their appeal underscores the need for adjustments to the current 2023-2025 mandates (which are too low to scale biofuel/feedstock industry growth).
Stifled Industry Movement Until Volume Growth Occurs
The EPA's underwhelming renewable fuels policy is causing job losses across the biofuel industry. Organizations like the Energy Information Administration highlight that the swift growth in renewable diesel capacity, coupled with low Renewable Volume Obligations (RVOs), leads to plant closures.
Among the casualties are Chevron's biodiesel plants in Iowa and Wisconsin, which shut down in March. In May, Vertex Energy announced that it was shuttering all renewable diesel production at its Alabama-based refinery later in the year.
Changes Necessary to Keep Up with the Renewables Climate
The plea to the EPA is among a growing number of industry demands that the body act on the RFS rule. Doing so will reflect actual market movement in line with fuel and feedstock producers.
Even more importantly, substantive changes will also encourage more widespread renewable adoption. Stifled industry growth will slow down those who have already adopted low-carbon fuels. What's worse, it will also cause hesitation in organizations currently searching for renewable solutions.
As the letter to the EPA stated, making these changes will benefit consumers and producers alike while directly improving US CO2 emissions:
"Opening the market fully to abundant supplies of renewable fuels like ethanol, biodiesel, renewable diesel, and sustainable aviation fuel would better protect consumers from high fuel and food costs while supporting farmers and other food producers. Greater use of renewable fuels is also crucial to helping reduce the nation’s greenhouse gas emissions." …
"The EPA should utilize the RFS to improve energy security, bolster domestic industry and manufacturing, and maintain America’s leadership in developing and using sustainable, clean transportation technologies."
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