Clean Air Act Updates To Renewable Fuel Standard

Clean Air Act Updates to Renewable Fuel Standards

The fuel industry received a bit of a reprieve at the end of 2015, when the EPA announced revisions and the finalized renewable fuel standards associated with the Clean Air Act, originally introduced in 2005.

A Bit of Fuel History

In recent years, the issue of Global Warning has been on the minds of policymakers, the fuel industry, energy companies, c-store owners, and the media. National concern for the environment is has been growing stronger over the years. Congress created The Renewable Fuel Standards program in The Energy Policy Act of 2005, and later expanded upon it in 2007, in the Energy Independence and Security Act.

Going a step further, under section 211 of the Clean Air Act, the Environmental Protection Agency (EPA) is required to set renewable fuel percentage standards annually. Congress created the Renewable Fuel Standard (RFS) program to reduce greenhouse gas emissions and expand the nation’s renewable fuels sector in hopes of reducing the country’s reliance on imported oil. So, to further break it down, the RFS program is a national policy that requires a certain volume of renewable fuel to replace or reduce the quantity of petroleum-based transportation fuel, heating oil or jet fuel.

While environmentalists were applauding the Clean Air Act, the fuel industry was left with the hefty task of revamping the entire industry’s production standards to meet the newer stringent laws. Most industry leaders felt the ruling was unfair in its expectations and the initial reaction was negative.

Revised and Finalized

The EPA finalized the volume requirements on November 30, 2015, as well as the associated percentage standards under the RFS program for calendar years 2014, 2015, and 2016. These standards include four renewable fuels. The EPA also finalized the volume requirement for biomass-based diesel for 2017.

The four renewable fuels under the RFS include:

  • Biomass-based diesel
  • Cellulosic biofuel
  • Advanced biofuel
  • Total renewable fuel

The agency said it will now require more than 18 billion gallons of renewable fuels, most of it ethanol, next year. The amount is less than what was set in a 2007 renewable fuels law but more than what was previously proposed by the EPA. The fuel industry and its counterparts have regulated annual percentage standards they must all abide by regarding cellulosic biofuel, biomass-based diesel, advanced biofuel, and total renewable fuel that apply to all motor vehicle gasoline and diesel produced or imported in the years 2014, 2015, and 2016. This action also establishes the applicable volume of biomass-based diesel for 2017.

What Does It Mean

The ambitions of these new renewable fuels law will promote solving global warming, reduce dependence on foreign oil and bolster the rural economy. The new standards require a steady increase in the overall amount of ethanol and other renewable fuels blended into gasoline over time.

The EPA is establishing a cellulosic biofuel volume for all three years that is below the applicable volume specified in the Act. It is also rescinding the biofuel cellulosic standard set in 2011. The National Association of Convenience Stores (NACS) applauded the EPA for recognizing the original targets were conveniently unattainable, and believes the new standards are more realistic.

Why it’s Important to You

The goal is to boost renewable fuel production and create robust, achievable growth of the biofuels industry. Initially, next-generation biofuels, made from agricultural waste such as wood chips and corncobs, have not taken off as quickly as Congress required. The final rule won’t necessarily translate to higher percentages of ethanol in a driver’s actual tank, and it will likely leave gas prices unaffected. The final rule won’t necessarily translate to higher percentages of ethanol in a driver’s actual tank.

The final 2016 standard for advanced biofuel is almost 1 billion gallons, which is 35% higher than the actual 2014 amounts. Also, the ruling requires that the projected biodiesel standards need to grow over the next several years. The goal is to increase every year to reach 2 billion gallons by 2017. The takeaway from the ruling is that policy makers have finalized what they hope to be attainable goals working toward solving a myriad of environmental problems. Also, the hope is to implement a strategy that will also address our nation’s dependency on foreign oil.

Finally, the hope is that this is a viable solution that is agreeable and attainable across the spectrum, allowing for environmental strides and industry improvements.

Cleans Fuels Associates works hard to make sure our clients are always on top of any fuel standard policies and changes. We work throughout many industries to make sure their fuel and systems are working to peak performance. To learn more about what we can do for you.