RFS Roundup:  EPA Sets Timeline for Three-Year RFS Release, But Still Evokes “Blend Wall”

On April 3, the EPA settled a lawsuit brought against the agency by the American Petroleum Institute (API) and the American Fuel and Petrochemical Manufacturers (AFPM) in March.  The suit argued that the regulatory delays of the 2014, 2015 and now 2016 renewable fuel blending requirements under the Renewable Fuel Standard (RFS) creates uncertainty for refiners who are obligated to blend ethanol fuel into the transportation fuel supply.  The EPA will set the blending requirements for 2014 by June 1; the 2015 and 2016 standards will be set by November 30.

In a statement, the agency writes that “This schedule is consistent with EPA’s commitment to get the RFS program back on track, while providing certainty to renewable fuel markets and promoting the long-term growth of renewable fuels.”  While it is expected that the agency will set 2014 levels at actual production, the question now remains at what levels the agency will require for 2015 and 2016.  The November 2013 proposal to lower the total volume of renewable fuels set off a firestorm of debate and lawsuits from both the ethanol and the oil industry. 

While the ethanol industry expressed relief that the EPA has set a timeline, the decision may have put some ethanol groups on edge as to what EPA’s final decision for 2015 and 2016 volumes will be.  With the timeline, EPA still continues to allow infrastructure challenges to drive their regulatory agenda, using the “blend wall”, as a reason to re-visit volumes.  While moving past E10 represents minor infrastructure challenges, the burden to use increasing amounts of ethanol rests on the obligated parties – the oil industry – to make sure the fuels are in the marketplace. 

Yet, Christopher Grundler, director of the EPA's Office of Transportation and Air Quality, alluded to the “blend wall” by stating, “the fact is today there are way more gasoline stations that sell E10 and not very many today that sell E15 or E85 …Those are facts that we can't ignore."  At the same time, E15 use has been certified as safe to use for vehicles 2001 and newer, which represents more than 80 percent of all vehicles on the road today. These fuels have also been found to be safe for use with existing infrastructure, including gas station pumping equipment.  Additionally, over 70 percent of auto manufacturers have certified the use of E15 in new 2015 vehicles. Therefore, the E10 ‘blend wall’ is purely artificial. 

For more information see:

EPA, oil groups reach settlement on ethanol mandate, The Des Moines Register

EPA settles lawsuit over ethanol mandate, The Hill