Missed Opportunity for EPA to Cut Back Renewable Fuel Standard

December 17, 2015

On Monday, the Environmental Protection Agency’s latest Renewable Fuel Standard (RFS) was published in the Federal Register, requiring 18.11 billion gallons of biofuel to be blended into transportation fuels in 2016. While EPA is required to publish annual standards, the final rule retroactively sets biofuel mandates for 2014 and 2015, years for which EPA failed to set a final standard.

While EPA’s final standards fall short of statutorily required levels by 4.14 billion gallons, they represent a 700 million gallon increase in comparison to the standards originally proposed in June 2015. Unfortunately, as we explained in a comment filed on EPA’s proposal, this biofuel mandate is bad news for the environment and for American consumers: the past decade has provided evidence that mandated ethanol production could be creating more carbon dioxide emissions than gasoline and polluting waterbodies via nitrogen fertilizer runoff. In fact, EPA’s Office of the Inspector General recently announced that it is inspecting the RFS program to evaluate its environmental impacts.

What is the Renewable Fuel Standard?

The RFS program requires refiners to blend specific amounts of renewable fuels into transportation fuel, such as gasoline and diesel. The RFS program was created in 2005 to reduce both American dependence on foreign oil and domestic gasoline consumption. While the stated goals of the RFS are to reduce crude oil imports and increase the use of renewable fuels, an implicit purpose of the RFS program is to benefit the environment by moving away from gasoline and diesel, fuels that result in substantial carbon emissions.

Environmental Damage

Since Congress authorized the RFS program, academic research has indicated that the production of ethanol and biodiesel may significantly increase emissions, specifically of the greenhouse gases carbon dioxide (CO2) and nitrous oxide (N2O) and criteria pollutants such as particulate matter. While estimates vary, recent research indicates that the environmental effect of the RFS is extremely modest at best and, at worst, could result in a significant increase in CO2 emissions over gasoline. Overall, the post-2007 literature largely reinforces that ethanol production increases emissions and damages wetlands. The two main sources of this environmental harm are land use change and increased use of fertilizers.

First, increased biofuel production causes land use changes that result in the release of soil organic carbon. Increased demand for corn and soy provides farmers with an incentive to produce more crop and convert unused lands into cropland, which releases a significant amount of soil organic carbon and foregoes future carbon sequestration and storage.

Second, fertilizer input for the production of crops used to produce biofuels results in emissions of N2O, a greenhouse gas that contributes to climate change. A 2012 analysis found that the necessary fertilizer input for the increased production of corn and rapeseed leads to N2O emissions that matched or exceeded the corresponding cooling achieved by the reduction in CO2 emissions resulting from fossil fuel replacement. But that’s not all: increased fertilizer runoff causes water pollution, damages ecosystems, harms biodiversity, and is contributing to the Gulf of Mexico’s “Dead Zone.”

EPA’s Missed Opportunity

The availability of new scientific, technical, and economic information shows that the RFS program does not work as it was intended to, and is likely causing significant environmental harm through increased greenhouse gas emissions and damage to waterbodies and ecosystems. The latest final RFS rule was a missed opportunity for EPA to slow the growth of biofuel mandates that increase pollution without accomplishing important environmental goals.

Given the availability of new information on the impacts of the program, Congress, the EPA, and the EPA’s Inspector General should reevaluate whether the Renewable Fuel Standard is accomplishing what Congress intended: a greener fuel future that benefits consumers and the environment alike.