EPA Proposes RVO Rules

The Environmental Protection Agency this week released its long-overdue proposed rules for renewable volume obligations for 2021 and 2022. 

Emily Skor, Growth Energy: “Typically, we get EPA proposing renewable blending requirements for one year. This proposal includes three years, 2020, '21, '22. When you look at the totality of the proposal, it really is a mixed bag for the industry.” 

For 2021, the EPA estimates the RVO would be set at 18.5 billion gallons of renewable fuels. The 2022 RVO would rise to 20.7 billion gallons. 

The EPA has struggled to estimate renewable fuel demand as the economy recovers from drops in fuel demand caused by the COVID-19 pandemic. 

The agency also proposed reducing the total RVO for 2020, from 20 to roughly 17 billion gallons, a drop of 10 percent.  

Emily Skor, Growth Energy: “So what the agency did for 2020, and they've never done this before. Two years after they finalized requirements for 2020, they go back and they reopen up and they wave, they wave 2.5 billion gallons of obligations for conventional corn ethanol. So what they're saying to every single refiner is you have been building your business practice and making your decisions for two years on a set of obligations. We're going to lower those and they've done it for every single refiner in the sector. This is unprecedented. It is far beyond EPA's authority to do this, and it's unwarranted because the RVO has a built in mechanism that already accounts for fluctuations in fuel demand.

In a separate action, the EPA is proposing to deny the small refinery exemptions of more than 60 small refineries. Many of the exemptions were approved by the EPA during the Trump Administration, and were contested by the renewable fuels industry as allowing the petroleum industry to avoid the tenants of the Renewable Fuel Standard. 

A public hearing on the proposed rules will be held on January 4th.

For Market to Market, I’m Peter Tubbs  peter.tubbs@iowapbs.org