Renewable Fuels Standard

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Bioenergy > Policy > United States policy > Renewable Fuels Standard (RFS)

The Renewable Fuel Standard (RFS) is a provision of the US Energy Policy Act of 2005 that mandated 7.5 billion gallons of renewable fuels by 2012.

  • There are at least 73 ethanol plants under construction and another 8 facilities expanding. This will bring ethanol capacity in the United States to 11.4 billion gallons per year by 2008-09 or before1.
  • This means that RFS target may be exceeded nearly four years ahead of schedule.

Contents

Summary RFS and Renewable Tax Provisions

  • The Energy Policy Act of 2005 - Conference Report - HR 6

Definitions

  • Establishes definitions for the renewable fuels program, including cellulosic biomass ethanol, waste derived ethanol, renewable fuel, and small refinery.

Fuel Program

  • Directs EPA to promulgate regulations ensuring that applicable volumes of renewable fuel are sold or introduced into commerce in the United States annually.
  • Regulations apply to refiners, blenders, and importers.
  • If regulations are not issued, the applicable percentage for 2006 is set at 2.78%.
  • Sets forth a phase- in for renewable fuel volumes over 7 years, beginning with 4 billion gallons by 2006 and ending at 7.5 billion gallons in 2012.
Year Renewable Fuels (billions of gallons)
2006 4.0
2007 4.7
2008 5.4
2009 6.1
2010 6.8
2011 7.4
2012 7.5
  • Provides EPA discretion on the future uses of renewable fuels including a minimum requirement of renewable fuels use in 2013 shall not be less than the percentage of 7.5 billion gallons of renewable fuel to the total number of gallons of gasoline in 2012.
  • Requires EIA, for the years 2006 through 2011, to provide an annual estimate of volumes of gasoline sold or introduced into commerce for the coming year.
  • Based on these estimates, DOE must publish regulations to ensure renewable fuel obligations for refiners, blenders, and importers are met.
  • Creates a 1-year credit-trading program for refiners, blenders or importers of petroleum.
  • Seasonal Variations - Requires EIA, for calendar years 2006 through 2012, to conduct an annual study on seasonal variations in renewable fuel use.
  • If the DOE determines, based on the study, that seasonal variations exist and will continue the Administrator must promulgate regulations ensuring that at least 25 percent of the annual renewable fuel obligation is met in each of 2 specified periods in the subsequent calendar year.
  • Exempts states that have received a 209(b) waiver (California) from the seasonal variation requirements of the bill. Note however, the refiners within California would still be required to use the requisite amount of renewable fuels in any given year.

Waivers

  • Authorizes DOE, in consultation with the Secretary of Agriculture and the Secretary of Energy, to waive the renewable fuels mandate for one or more States if the Administrator determines that implementing the requirements would severely harm the economy or the environment, or that there is inadequate domestic supply to meet the requirement.
  • Petitions for waivers must be acted on within 90 days of receipt and terminate after 1 year (but may be renewed).

Small Refineries

  • Exempts small refineries from the renewable fuels mandate for 5 years.
  • Requires DOE to assess whether the requirement places a disproportionate economic hardship on small refiners, and requires DOE to waive the requirement for an additional 2 years if such a hardship is discovered.
  • Small refineries may petition DOE for additional extensions for economic hardship.
  • If a small refinery chooses not to accept the waiver, it will receive credits for production in the following years.

Data Collection

  • Requires a monthly survey of renewable fuels demand in the motor vehicle fuels market.

Cellulosic Bimass Program

  • Creates a credit-trading program where 1 gallon of cellulosic biomass ethanol or waste derived ethanol is equal to 2.5 gallons of renewable fuel.
  • Creates a cellulosic biomass program of 250 million gallons in 2013
  • Creates a Loan Guarantee Program of $250 million per facility
  • Creates a $650 million Grant Program for cellulosic ethanol
  • Creates an Advanced Biofuels Technologies Program of $550 million.

Sugar to Ethanol Program

  • Creates a $36 million program to convert sugar cane to ethanol in Hawaii, Florida, Louisiana and Texas.
  • Creates a $250 million loan guarantee program for sugar to ethanol facilities.
  • Creates a $50 million loan guarantee program for sugar cane to ethanol facilities.

Renewable Tax Provisions

  • Extends Biodiesel VEETC Tax Credit through December 31, 2008
  • Creates Alternative Fuels Installation Fuel Refueling Property of up to 30%.
  • Modifies the Small Ethanol Producer Credit to 60 million gallons
  • Create a new Small Agribiodiesel Producer Credit

Events

News

2010

  • USDA Reports Show U.S. Ag Can Meet Demand for Food, Feed and Fuel, 18 August 2010 by 25 x 25: "News recently coming out of USDA is more evidence of the ability of U.S. agriculture to produce crops large enough to satisfy the demand for food, feed AND fuel. According to reports released by USDA, America’s farmers are on course toward a record corn crop and record yield per acre this year, passing the records set only a year ago."
    • "The USDA reports support the EPA decision earlier this year to revise the Renewable Fuels Standard and make more corn eligible under the RFS, noting that the burning of advanced ethanol made from corn results in a 20-percent reduction in greenhouse gas emissions when compared to gasoline."[2]
  • Agriculture Secretary Vilsack Awards Woody Biomass Utilization Projects, 24 June 2010 by the USDA: "Agriculture Secretary Tom Vilsack today announced the award of more than $4.2 million in grants to 13 small businesses and community groups developing innovative renewable energy projects and new product development using woody biomass from hazardous fuel reduction projects on National Forest land."
    • "'Energy derived from woody biomass, switch-grass and other sources has enormous potential benefits for reducing greenhouse gas emissions, developing clean, home-grown energy, and providing economic opportunities for rural America,' Vilsack said. 'Markets for woody biomass can also bolster forest restoration activities on both public and private lands, improving the ecological health of our forests and reducing the impacts of global climate change.'"
    • "In Arizona, for example, Cooley Forest Products will purchase a mobile canter saw allowing them to process small logs at a forest landing, thereby reducing transportation costs. West Range Reclamation in Colorado can now acquire a delimber/debarker allowing them to efficiently process beetle-killed trees."
    • "Earlier this week, Vilsack released a report which provided a roadmap on how America can meet the Renewable Fuel Standard (RFS2)."[3]
  • EPA's Biofuel Mandates Based on Shaky Assumptions, Scientists Say, 20 April 2010 by SolveClimate: "Federal renewable fuel mandates have created an industry around corn ethanol that now consumes nearly a third of the U.S. corn crop. But what is the rationale behind those mandates in the first place? Several scientists have asked and found the answers to be unsound."
    • "When the Environmental Protection Agency revised its renewable fuel standards in February, the agency recalculated the lifecycle emissions of corn ethanol to find that it was 20 percent less greenhouse-gas emitting than gasoline and, therefore, qualified as a renewable fuel. Some wondered what had changed since an EPA review issued less than a year before found that emissions from corn ethanol were too high for it to qualify."
    • "As it turns out, none of the actual data about emissions from biofuels changed — just the way the EPA presented it....Specifically, the agency's new fuel standards assess each biofuel based on its assumed greenhouse gas emissions in the year 2022, the deadline by which renewable fuel production must be at levels mandated by the Energy Security and Independence Act of 2007."
    • But focusing on the amount biofuels are expected to emit in 2022 'distorts the picture of today's biofuels,' according to Jeremy Martin, a senior analyst in the Union of Concerned Scientists' Clean Vehicles Program."
    • "Even the EPA's own analysis 'shows that, in the near term, natural-gas-powered, dry-milled corn ethanol production results in an increase of greenhouse gas emissions of 12 to 33 percent compared to gasoline,' says Joe Fargione, a lead scientist at the Nature Conservancy."[4]
  • White House Clears Rules on Indirect GHG Emissions From Biofuels, 2 February 2010 by Greenwire/New York Times: "The White House has completed its review of controversial U.S. EPA regulations aimed at curbing renewable fuels' greenhouse gas emissions."
    • "The Office of Management and Budget signed off on the rule yesterday..., clearing EPA to finalize the long-delayed implementation of the renewable fuels standard that Congress included in the 2007 energy bill."
    • "The standard requires EPA to assess the "lifecycle" emissions of biofuels -- weighing the emissions from growing crops, producing fuels made from them, and distributing and using the fuels."
    • "The draft regulations EPA proposed last year sparked outrage from biofuels advocates and farm-state lawmakers who maintained the agency was unfair to ethanol."
    • "The EPA proposal measures emissions from "indirect" land-use changes associated with biofuels -- such as land that is deforested in other countries because of increased crop growth in the United States. The agency concluded, depending on the time frames modeled, that traditional corn ethanol could have a slightly larger emissions footprint than gasoline when land-use changes are factored in."[6]
  • U.S. Feeds One Quarter of its Grain to Cars While Hunger is on the Rise, 21 January 2010 press release by Earth Policy Institute: "The 107 million tons of grain that went to U.S. ethanol distilleries in 2009 was enough to feed 330 million people for one year at average world consumption levels. More than a quarter of the total U.S. grain crop was turned into ethanol to fuel cars last year."
    • "The amount of grain needed to fill the tank of an SUV with ethanol just once can feed one person for an entire year....Continuing to divert more food to fuel, as is now mandated by the U.S. federal government in its Renewable Fuel Standard, will likely only reinforce the disturbing rise in hunger."[7]

2009

  • Exxon Sinks $600M Into Algae-Based Biofuels in Major Strategy Shift, 15 July 2009 by The New York Times: "Exxon is joining a biotech company, Synthetic Genomics Inc., to research and develop next-generation biofuels produced from sunlight, water and waste carbon dioxide by photosynthetic pond scum."
    • "Next-wave biofuels that could reduce carbon emissions and displace oil imports are politically popular but have not moved into commercial production as fast as supporters would have hoped. Biofuels overall got a boost through a 2007 law that expands the national renewable fuels standard, or RFS, to reach 36 billion gallons by 2022."
    • "Senate Energy and Natural Resources Chairman Jeff Bingaman (D-N.M.) said the RFS expansion is too restrictive and could freeze out emerging technologies -- including algae-based biofuels....'despite having characteristics superior to any renewable fuels in commercial production today, [algae-based fuels] have no home in the RFS'".
  • A New North American Consensus in Biofuels, 18 February 2009 by MSNBC:
    • "As America and Canada look for ways to provide economic opportunity, reduce the impacts of climate change, and develop renewable energy sources, the role of biofuels in the energy plans of both nations is becoming increasingly important. Both nations are investing in alternatives to imported oil."
    • "Paralleling efforts in the U.S. to expand the use of ethanol, the Canadian Parliament last year passed a Renewable Fuel Standard (RFS) requiring gasoline sold in Canada to contain an average of 5% renewable content, including ethanol, and 2% renewable content, including biodiesel, in the diesel supply.'
    • "Finally, based on a number of recent studies, it is clear that renewable fuels using both grains and cellulosic feedstocks are better for the environment than gasoline."

2008

  • Texas Biofuels Waiver Request Shot Down, 7 August 2008 by Environment News Service: "The Bush administration today denied a request by Texas to cut the U.S. biofuels mandate in half, rejecting the claim that the massive increase in corn-based ethanol is causing economic harm to the state's livestock industry and raising food prices."
    • "Today's announcement came in response to a request made in April by Texas Governor Rick Perry, who asked the U.S. Environmental Protection Agency to cut the RFS mandate by 50 percent."
    • "Perry ... argues that demand for ethanol is responsible for corn prices that reached record levels in June, up nearly 120 percent from 2007. Those high corn prices that are harming his state's cattle and poultry farmers, Perry said in his request, and are being passed onto consumers in higher food costs."
    • "But the head of the EPA disagreed. The RFS mandate is not causing the "severe economic harm" required by law to waive the requirement, EPA Administrator Stephen Johnson said today."

References

1Biofuels: Statement Of Keith Collins Chief Economist, U.S. Department Of Agriculture Before The U.S. Senate Committee On Agriculture, Nutrition And Forestry - 10 January 2007.

Publications

Selected Issues Related to an Expansion of the Renewable Fuel Standard (RFS) Congressional Research Service Report for Congress updated January 23, 2009 by Brent D. Yacobucci and Tom Capehart, but not yet available for the public.

Selected Issues Related to an Expansion of the Renewable Fuel Standard (RFS) (PDF file) Congressional Research Service Report for Congress updated March 31, 2008 by Brent D. Yacobucci and Tom Capehart. The document discusses issues facing the U.S. biofuels industry including current supply issues, implications for agricultural feedstocks, infrastructure concerns and fuel price uncertainties.

Selected Issues Related to an Expansion of the Renewable Fuel Standard (RFS) (PDF file) Congressional Research Service Report for Congress updated December 3, 2007 by Brent D. Yacobucci and Tom Capehart. "This report supersedes CRS Report RL33928, Ethanol and Biofuels: Agriculture, Infrastructure, and Market Constraints Related to Expanded Production." [9]


United States Policy edit
Federal policies: Renewable Fuel Standard | Energy Policy Act of 2005 (P.L. 109-58) | Energy Independence and Security Act of 2007 | Biomass Research and Development Act of 2000 | Farm Bill

Proposed policy: President's Twenty in Ten | Biofuels Innovation Program
State policies: California | Minnesota |
Proposed Federal Legislation: Energy Bill |

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