11 August 2008

The US Environmental Protection Agency (EPA) has denied 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 mandated to be blended into the fuel supply will remain at 9 billion gallons in 2008 and 11.1 billion gallons in 2009.

“After reviewing the facts, it was clear this request did not meet the criteria in the law,” said EPA Administrator Stephen L. Johnson. “The RFS remains an important tool in our ongoing efforts to reduce America’s greenhouse gas emissions and lessen our dependence on foreign oil, in aggressive yet practical ways.”

In April, Texas governor requested a waiver of 50% of the RFS mandate for the production of ethanol from grain, citing adverse economic impact due to higher corn prices in Texas. Over the past three years, global corn prices are up 138% and food prices have increased 83%, in part because of the artificial economic forces created by the RFS requirements, argued the governor of Texas.

The law authorizes EPA to waive the national RFS if the agency determines that the mandated biofuel volumes would cause “severe harm” to the economy or the environment. The EPA recognized that high commodity prices are having economic impacts, but it found no compelling evidence that the RFS mandate is causing severe economic harm. EPA considered more than 15,000 public comments in response to the Texas request.

In theory, the RFS mandate can be fulfilled through a number of biofuels, for example biodiesel or biofuels made from non-food feedstocks. However, the economics and the existing incentive system force the use of corn ethanol to fufill nearly all the RFS requirement. The environmental effect of the increased use of ethanol remains uncertain. Several life cycle studies have identified corn ethanol as one of the least effective biofuels to reduce greenhouse gas emissions. According to some authors, under the energy-intensive US production methods, corn ethanol requires more fossil energy to produce than the energy content of the fuel, thus causing increased greenhouse gas emissions.

The RFS program was established by the Energy Policy Act of 2005. RFS nationwide volume mandates were increased in the Energy Independence and Security Act, which was signed into law in December 2007.

Source: US EPA: Press release | Texas request