6 May 2009

The US Environmental Protection Agency (EPA) proposed the revised National Renewable Fuel Standard program, known as RFS2. The proposal addresses changes to the RFS program as required by the Energy Independence and Security Act of 2007 (EISA).

As required by the EISA act, three major changes are introduced in the RFS2 program: (1) the renewable fuel volume requirements are increased, (2) the overall renewable fuel requirement is divided into four renewable fuel categories, and (3) each of the mandated renewable fuels must achieve a certain minimum greenhouse gas (GHG) emission reduction relative to the gasoline or diesel fuel it replaces. The regulatory requirements for RFS will apply to domestic and foreign producers and importers of renewable fuel.

The renewable fuel categories are:

  • Cellulosic Biofuel: Renewable fuel derived from any cellulose, hemicellulose, or lignin each of which must originate from renewable biomass. The minimum required lifecycle GHG emission reduction is 60%. This category includes, but is not limited to, cellulosic ethanol.
  • Biomass-Based Diesel: Biodiesel (mono-alkyl esters) and non-ester renewable diesel (e.g., cellulosic diesel) that is made from renewable biomass. The lifecycle GHG emission reduction must be at least 50%. “Renewable diesel” derived from co-processing of biomass with petroleum feedstocks is excluded from this category.
  • Advanced Biofuel: Renewable fuel other than corn ethanol that achieves a lifecycle GHG emission reduction of 50%.
  • Total Renewable Fuel: Fuel produced from renewable biomass. This category includes all of the above, as well as corn ethanol and other conventional biofuels such as biodiesel.

The proposal includes renewable fuel volume requirements for each of the above categories, as listed below. The 2022 target of 36 billion gallons represents about 11% of US annual consumption of gasoline and diesel.

RFS2 Renewable Fuel Volume Requirements, billion gallons
YearCellulosic BiofuelBiomass-Based DieselAdvanced BiofuelTotal Renewable Fuel
2008n/an/an/a9.0
2009n/a0.50.611.1
20100.10.650.9512.95
20110.250.801.3513.95
20120.51.02.015.2
20131.0a2.7516.55
20141.75a3.7518.15
20153.0a5.520.5
20164.25a7.2522.25
20175.5a9.024.0
20187.0a11.026.0
20198.5a13.028.0
202010.5a15.030.0
202113.5a18.033.0
202216.0a21.036.0
2023+bbbb
a - To be determined by EPA through a future rulemaking, but no less than 1.0 billion gallons.
b - To be determined by EPA through a future rulemaking.

The allowance for conventional biofuels, such as corn ethanol, is represented by the difference between the “total renewable diesel” and the sum of the three remaining categories. As apparent from the table, conventional biofuels would be gradually phased out and from around 2022 they would no longer be classified as renewable fuels. This represents a change in government policy and a diminishing support for conventional corn ethanol which was the main biofuel used to fulfill the requirements of the existing RFS program. According to a number of lifecycle analyses, corn ethanol was one of the least effective fuel paths to control GHG emissions.

The EISA act sets mandatory lifecycle GHG reduction thresholds for renewable fuel categories, relative to those of average petroleum fuels used in 2005. The EISA lifecycle GHG reduction requirements are:

  • 20% reduction for any renewable fuel produced at new facilities, constructed after enactment,
  • 50% reduction for biomass-based diesel or advanced biofuel, and
  • 60% reduction for cellulosic biofuel.

The EPA has a limited flexibility to adjust these GHG thresholds downward by up to 10% under certain circumstances.

The GHG emission calculation methods to be used for the RFS2 program have been developed in cooperation between the EPA and the California ARB, and are expected to be consistent with the methods used in the California low carbon fuel standard. Both calculation methods include the controversial indirect land use change effect.

In the proposal, the EPA included two options of GHG effect calculation: (1) a 30 year time period for assessing future GHG emission impacts, and (2) a 100 year time period for GHG emission impacts with a discount for future emissions at 2% annually. Depending on the option and on the production method, corn ethanol produced lifecycle GHG effects from -47% (biomass dry mill with combined heat and power, 100 years) to as much as +34% (coal dry mill, 30 years). Hence, corn ethanol would not qualify as “advanced biofuel”.

Soy-based biodiesel produced GHG effects from -22% (100 years) to +4% (30 years), according to the EPA analysis. Thus, conventional biodiesel would not qualify as “biomass-based diesel”.

Both the corn ethanol and the soy biodiesel industries have been lobbying against the RFS2 proposal.

The EPA RFS2 proposal has been issued in conjunction with two other regulatory announcements concerning biofuels:

  • President Obama has established a Biofuels Interagency Working Group, to be co-chaired by the Secretaries of Agriculture and Energy and the EPA Administrator, to further the research, development and commercialization of biofuels.
  • The Department of Energy will provide $786.5 million from the American Recovery and Reinvestment Act to accelerate advanced biofuels research and development and to provide additional funding for commercial scale biorefinery demonstration projects.

Source: US EPA