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.
- The United States currently produces 5 billion gallons of ethanol.
- 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 |
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Summary RFS and Renewable Tax Provisions
- The Energy Policy Act of 2005 - Conference Report – HR 6
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DEFINITIONS
- Establishes definitions for the renewable fuels program, including cellulosic biomass ethanol, waste derived ethanol, renewable fuel, and small refinery.
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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.
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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).
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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.
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DATA COLLECTION
- Requires a monthly survey of renewable fuels demand in the motor vehicle fuels market.
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CELLULOSIC BIOMASS 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.
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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.
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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
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News
- 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."
- EPA Keeps Biofuels Levels in Place after Considering Texas’ Request, 7 August 2008 by EPA Newsroom: "U.S. Environmental Protection Agency (EPA) Administrator Stephen L. Johnson today announced his decision to deny a request submitted by the State of Texas to reduce the nationwide Renewable Fuels Standard (RFS). As a result, the required total volume of renewable fuels, such as ethanol and biodiesel, mandated by law to be blended into the fuel supply will remain at 9 billion gallons in 2008 and 11.1 billion gallons in 2009."[1]
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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.
| 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
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