Both the National Corn Growers Association and the Renewable Fuels Association have submitted comments to the Environmental Protection Agency in support of altering current biofuels production levels as stipulated in the Renewable Fuels Standard to better reflect market conditions.
Comments regarding the RFS volume levels are required under section 211(o) of the Clean Air Act.
Lower cellulosic requirement
RFA called for revising the proposed 2013 cellulosic biofuel standard to correspond with current expectations of actual 2013 production volumes. The group said while the industry continues to make significant advances towards commercial production on a large scale, cellulosic capacity is still below the required levels of the RFS.
The original timeframe and volume goals for cellulosic production included 500 million gallons by 2012, 1 billion gallons for 2013 and 16 billion gallons by 2022. However, by the end of last year, the Energy Information Administration reported that commercial-scale production of cellulosic biofuel generated only about 20,000 gallons.
Despite the big difference, RFA clarified that they are asking EPA to focus not on past production, rather offer forward-looking projections.
"Basing annual cellulosic biofuel requirements on past production levels would entirely ignore volumes of cellulosic biofuel production scheduled to come online during the year," RFA CEO Bob Dineen said in RFA comments. "Such an approach would discourage project developers from expeditiously completing construction and commissioning of new cellulosic biofuel facilities."
Partial reduction of advanced biofuels
The RFA and the National Corn Growers also called for a slight reduction in the 2013 advanced biofuel standard to account for lower sugarcane ethanol imports.
EPA is proposing a 2.75 billion ethanol equivalent gallons, with 1.92 billion eeg of biomass diesel and 150 million eeg of other fuels counting toward the requirement. While RFA says biomass diesel can meet the requirement, they say EPA's estimate of the contribution from other domestic advanced biofuels may be overly aggressive.
RFA says there are several reasons for the concern: increases in blend rates for Brazilian fuels has put more pressure on Brazilian ethanol markets, limiting imports; U.S. sugarcane ethanol imports are slowing; European sugarcane demand is increasing; and lack of exportable ethanol surplus from the U.S. is limiting circular trade with Brazil.
National Corn Growers Association President Pam Johnson added that retaining the high requirement and relying on sugarcane ethanol could depress conventional biofuel demand and escalate Renewable Identification Number prices.
An ongoing point of contention, RFA says the "blend wall" – a cap on the amount of ethanol that can be blended into traditional fuels due to ethanol blending limits – should not be a reason to limit the volume requirements in the RFS.
The group says viable options exist for breaking through the E10 blend wall and meeting RFS requirements with physical volumes.
"E15 and E85 blends are legally approved and offer a workable pathway for meeting increased RFS volumetric requirements," the group wrote." The current U.S. light duty automotive fleet unquestionably has the capacity to consume the modestly higher volumes of ethanol above the blend wall that would be required for RFS compliance."
RFA says only modest investments would be required to modernize fuel distribution and accommodate higher ethanol blends.
EPA is expected to release the final rule in November.