19 November 2008

The US Environmental Protection Agency (EPA) increased the 2009 renewable fuel standard (RFS) to 10.21%. This will result in an estimated 11.1 billion gallons of renewable fuels to be blended into transportation gasoline. The EPA also expects that 500 million gallons of biomass-based diesel fuel will be blended into the US diesel fuel pool in 2009.

The Energy Independence and Security Act of 2007 (EISA) established annual overall renewable fuel volume targets, reaching a level of 36 billion gallons in 2022. To achieve these volumes, EPA calculates a percentage-based standard by November 30 for the following year. Based on the standard, each refiner, importer and non-oxygenate blender of gasoline determines the minimum volume of renewable fuel that it must ensure is used in motor vehicle fuel. The 2008 standard was 7.76%, equating to roughly 9 billion gallons.

Separately, EPA is developing a proposed rule to implement the “RFS-2” regulation that will implement the RFS program changes mandated by EISA. However, fuel blenders will follow the current “RFS-1” rules in 2009, even though the RFS-1 program does not provide mechanisms for the implementation of several EISA provisions. For example, the current RFS-1 program does not have a mechanism to implement the EISA requirement to blend 500 million gallons of biomass-based diesel into diesel fuel.

The 2009 RFS requirements will be met mostly by blending corn-based ethanol into gasoline. This approach has been criticised, as on the lifecycle emission basis corn ethanol is considered one of the least effective fuels to reduce greenhouse gas (GHG) emissions.

Changes may be expected under the future RFS-2 program. Under the EISA, the renewable fuel volume requirements are to be separated into four categories: cellulosic biofuel, biomass-based diesel, advanced biofuel, and total renewable fuel. The renewable fuel definitions will include criteria, including lifecycle GHG emission performance, to classify any given renewable fuel into one of the above categories. The fuel pool subject to standards will be also expanded to include diesel and certain nonroad fuels.

Source: US EPA