The biomass-based diesel mandates in the final RFS rule were very disappointing for the industry, coming in below the initial proposal and actual production levels. And for corn ethanol production, EPA flatlined levels for the next three years missing a real opportunity.
EPA set the final corn-based ethanol mandate at the initial draft level for 2023, but below their proposal for 2024 and 2025 and also under the levels the ethanol industry asked the agency for.
Troy Bredenkamp, senior vice president for government affairs for the Renewable Fuels Association says, “There is 15.250 billion for 23. That 250 million there is the second half of a remand, a court ordered remand that was owed to conventional biofuel, but then they lowered it in years 2023 and 2024 down to 15 billion gallons.”
However, he says those Renewable Volume Obligations still exceed previous blending mandates. “We haven’t ever had 15 billion gallons blended within the domestic marketplace. So that’s a significant number and I think that’s something to keep in mind. We certainly wanted to see the additional 250 million gallons, simply because that does indicate to everyone looking at that as a growth pattern for conventional biofuels.”
Bredenkamp says that won’t stifle ethanol growth, but it is a missed opportunity.
For biomass-based diesel EPA increased RFS volumes in the final rule by only 590 million gallons over the three-year period, when production is already up nearly 400 million gallons in the first five months of 2023 verses last year.
Kurt Kovarik, vice president of federal affairs for Clean Fuels Alliance America says this a real disappointment and below current production. “When you consider the fact that the Department of Energy’s own Energy Information Administration kind of an independent data collection agency is projecting increased volumes of 650 million gallons this year, more than 800 million gallons next year. EPA is proposal of raising our volumes by 60 million this year, and 200 and some million next year is just a small percentage of what we see coming online.”
He says it remains to be seen how negative the RFS will be for the industry in terms of investment in feedstock capacity and the build out of additional biomass-based diesel capacity.
