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Provisions
of RFSII
The U.S. EPA recently released
the final RFSII (Renewable Fuel Standard II) rulemaking. Here are
some of the key provisions of the RFS II rule:
RFS Volume: The 2010
RFS volume standard is set at 12.95 billion gallons (bg). The EPA
is setting 2010 volume standards for new categories of renewable
fuels including cellulosic renewable fuel 6.5 million gallons (mg)
and biomass based diesel 1.15 bg. The EPA estimates that by 2022
the 36 billion gallon renewable fuel volume will displace about
13.6 billion gallons of petroleum-based gasoline and diesel fuel
and decrease gasoline costs by 2.4 cents per gallon and reduce
diesel
Lifecycle Greenhouse Gas
Emission Reductions: A key provision of the RFS2 is the
requirement that the lifecycle greenhouse gas emissions (GHG) of a
qualifying renewable fuel must be less than the lifecycle GHG
emissions of the 2005 baseline average gasoline or diesel fuel
that it replaces. Ethanol must meet a GHG reduction threshold of
20 percent for renewable fuel (corn) and 50 percent for advanced
biofuel (sugar cane). Bio-mass based bio diesel (soy, waste oil,
fat, greases) must meet a GHG reduction threshold of 50 percent
while cellulosic biofuels (ethanol and biodiesel) must meet a 60
percent GHG reduction threshold. The expanded use of renewable
fuels is expected to reduce greenhouse gas emissions by 138
million metric tons when the program is fully implemented in 2022
or the equivalent to taking about 27 million vehicles off the
road.
Biofuel
Feedstock Restrictions: New definitions under the RFS2 rule
require compliant renewable fuel to be derived from renewable
biomass feedstocks. The rule limits the types of crops and land
from which biomass may be harvested. Restrictions are applied to
two feedstock sectors: the agricultural sector (planted crops and
crop residues) and the non-agricultural sector (planted trees and
tree residues, animal waste material and byproducts, slash and
pre-commercial thinnings).
Diesel Fuel: As
required by law the renewable fuel standard is expanded to include
motor vehicle, non-road, locomotive and marine. Heating oil blends
are assigned RINs but are not subject to renewable volume
requirements.
Dispenser Labels: The
RFS II rule drops proposed requirements for mid level ethanol
blend dispenser label warnings. This proposal was meant to address
concerns about the potential misfueling of non-flex-fuel vehicles
with E85. All ethanol blends above ten percent per volume were
included due to the increasing industry focus on ethanol blender
pumps that are designed to dispense a variety of ethanol blends
(e.g., E30, and E40) for use in flex-fuel vehicles. The EPA will
wait until the agency makes a decision on a possible waiver to
allow an E-15 blend before finalizing any dispenser labels.
Obligated Parties:
The RFS2 rule did not adopt an alternative proposal that would
move obligated party status from refiners to downstream gasoline
and diesel fuel blenders who supply finished transportation fuels
to retail outlets or to wholesale purchaser-consumer facilities.
PMAA opposed this alternative because it would shift onerous
regulatory burdens from refiners to downstream blenders.
Upward Delegation of RINS:
The final rule adopted PMAA’s provision for blenders who only
blend a small amount of renewable fuel to allow the party directly
upstream to separate RINs on their behalf. This provision will
eliminate undue burden on small blenders who would otherwise not
be regulated by under the RINS program. The provision applies to
blenders who blend and trade less than 125,000 total gallons of
renewable fuel per year (i.e., a company that blends 100,000
gallons and trades another 100,000 gallons would not be able to
use this provision) and is available to any blender who must
separate RINs from a volume of renewable fuel.
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