Public Comment on EPA’s Proposed Renewable Fuel Standards for 2017 and Biomass-Based Diesel Volume for 2018

Corn field at sunset
by Sofie E. Miller, Senior Policy Analyst
July 12, 2016

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The George Washington University Regulatory Studies Center improves regulatory policy through research, education, and outreach. As part of its mission, the Center conducts careful and independent analyses to assess rulemaking proposals from the perspective of the public interest. This comment on the Environmental Protection Agency’s proposed rule establishing renewable fuel standards for 2017 and 2018 does not represent the views of any particular affected party or special interest, but is designed to evaluate the effect of EPA’s proposal on overall consumer welfare and provide recommendations for improving the analysis underpinning this proposal.

Introduction

As a part of its Renewable Fuel Standard (RFS) program, the Environmental Protection Agency (EPA) is proposing biofuel blending targets for 2017 and 2018. The RFS 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. According to EPA’s 2013 proposed rule, the RFS program “was created to promote substantial, sustained growth in biofuel production and consumption” resulting in “reductions in greenhouse gas emissions, enhanced energy security, economic development, and technological innovation.”[3] To that end, this proposal would mandate the production of 18.8 billion gallons of total renewable fuel in 2017, a 690 million gallon increase from the 2016 standards.

In its current proposal, EPA includes production standards for biomass-based diesel (biodiesel), total renewable fuel, advanced biofuel, and cellulosic biofuel, which can be seen in the table below. The 2017 standards for biodiesel were determined in the last RFS rulemaking; this proposed rule establishes biodiesel standards for 2018 (2.1 billion gallons).

RFS table

Although it is the largest type of domestic biofuel, corn ethanol is only one component of the overall total renewable fuel standards promulgated by EPA. The agency also sets advanced biofuel standards, which can be met by the production of three main fuel sources: biodiesel, imported sugarcane ethanol, and cellulosic biofuel. As can be seen in the above table, EPA sets minimum standards for the production of biodiesel and cellulosic biofuel, which also count toward the agency’s total renewable fuel standards. The total renewable fuel standards prescribed for 2017 must be met through a combination of corn ethanol and advanced biofuels (e.g. cellulosic and biodiesel).

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 fuels that result in substantial carbon emissions (e.g. gasoline and diesel). However, it is not clear whether the increased production of biofuels has actually reduced emissions or benefitted the environment. In fact, the EPA’s own Office of the Inspector General (OIG) is currently investigating the lifecycle impacts of the RFS, given progress in that body of research after EPA initially analyzed the program.[4]

EPA and the OIG should both note that the literature is mixed on the environmental effects of biofuel production, with many estimates indicating 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. The following sections explore the proposed renewable fuel standards for 2017, examine the tradeoffs that the agency faces in setting these standards, and critique the analysis that underpins these proposed standards.

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[1]    This comment reflects the views of the author, and does not represent an official position of the GW Regulatory Studies Center or the George Washington University. The Center’s policy on research integrity is available at http://regulatorystudies.columbian.gwu.edu/policy-research-integrity.

[2]    Sofie E. Miller is a Senior Policy Analyst at the George Washington University Regulatory Studies Center. She can be reached at [email protected] or at (202) 994-2974. The author thanks Summer Fellow Lili Carneglia for her research assistance, which supported this analysis and comment.

[3]    78 FR 71731

[4]    U.S. Environmental Protection Agency Office of the Inspector General. “Project Notification: Lifecycle Impacts of Renewable Fuel Standard; Project No. OPE-FY16-0005.” October 15, 2015. https://www.epa.gov/sites/production/files/2015-10/documents/newstarts_10-15-15_rfs.pdf