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HomeAg NewsThune, Durbin Lead Bipartisan Request for Historic RFS “Set” Rulemaking

Thune, Durbin Lead Bipartisan Request for Historic RFS “Set” Rulemaking

WASHINGTON — U.S. Sens. John Thune (R-S.D.) and Dick Durbin (D-Ill.), members of the Senate Committee on Agriculture, Nutrition, and Forestry, today led a bipartisan group of their colleagues in urging the Environmental Protection Agency (EPA) to establish renewable volume obligations that are additive for all fuel types in the upcoming “set” rule under the Renewable Fuel Standard (RFS). The senators also highlighted additional actions EPA should take in order to maximize the use and benefit of biofuels, including updating lifecycle analysis for biofuel emissions and approving additional fuel registrations and pathways under the RFS.

“Through this rulemaking, EPA has a historic opportunity to not only reinforce its efforts to restore integrity to the RFS, but chart a new course for biofuels that will help meet America’s diverse energy demands while further decarbonizing numerous sectors of our economy,” the senators wrote. “In order to guard against sidelining decades of investment and the diverse workforce that supports biofuels, we request that EPA set the conventional target above 15 billion gallons, set advanced biofuel volumes that account for increased production capacity of fuels like sustainable aviation fuel and renewable diesel, and ensure that renewable identification numbers (RINs) for emerging technologies and e-RINs are additive to existing volumes.”

“With the forthcoming ‘set’ rule, EPA has a golden opportunity to stimulate further growth in low-carbon fuel use and build on the successes of the Renewable Fuel Standard,” said Geoff Cooper, president and CEO of the Renewable Fuels Association. “We appreciate the efforts of Senator Thune, Senator Durbin, and other stalwart renewable fuel supporters to ensure EPA issues a ‘set’ rule that furthers the environmental and economic objectives of the original RFS program.”

“A stronger RFS means more savings at the pump for working families, lower carbon emissions, and greater U.S. energy security,” said Emily Skor, CEO of Growth Energy. “We’re grateful to Senators Durbin, Thune, and other clean energy champions working to deliver the regulatory certainty we need to fast-track growth in the U.S. bioeconomy and shield motorists from volatile global oil prices. This is a vital opportunity to drive transformative progress in low-carbon transportation, and we look forward to working with EPA Administrator Regan, the White House, and leaders on Capitol Hill to tap the full potential of the RFS as a climate and energy solution.”

“As we near EPA’s announcement on the proposed Set rule, ACE applauds Senators Thune and Durbin for their leadership on a timely, bipartisan letter urging the Agency to utilize this historic opportunity to increase biofuel blending targets and take other important steps to leverage the role low carbon biofuels can and should play to address our nation’s energy demands and meet the Administration’s decarbonization goals,” said Brian Jennings, CEO of American Coalition for Ethanol. “New incentives enacted by Congress will boost investments in clean fuel technologies that support action by EPA to expand the use of clean fuels like ethanol through future RFS targets.”

“We thank Senators Thune, Durbin, and others for highlighting the bipartisan support for continued growth in the Renewable Fuel Standard volumes,” said Kurt Kovarik, vice president of Federal Affairs for Clean Fuels Alliance America. “We appreciate the Senators’ request that EPA build on the foundation of advanced biofuels and provide additional space for emerging volumes of renewable diesel, sustainable aviation fuel, and other potential new biomass-based fuels.”

“We applaud Senator Thune and Senator Durbin for leading a bipartisan coalition working to maximize the clean energy benefits of the Renewable Fuel Standard (RFS),” said Brooke Coleman, executive director of the Advanced Biofuels Business Council (ABBC). “We keep hearing about the importance of strong policy to ensure that new technologies are developed, clean energy targets are hit, and U.S. global competitiveness is enhanced as we seek to reduce emissions and grow the economy. There is no better example than the RFS. We appreciate the recognition that an ambitious, multiyear RFS rule could be a game-changer for advanced biofuels, Sustainable Aviation Fuel (SAF), climate smart feedstock production, and transportation sector decarbonization.”

“Corn growers appreciate the Senators’ leadership and advocacy for renewable fuels with EPA,” said Tom Hagg, president of the National Corn Growers Association. “We also urge EPA to maximize the environmental and economic benefits of the RFS in the pending rulemaking, building on the success of biofuels to do more to cut emissions and lower fuel prices.”

This letter was also signed by U.S. Sens. Tammy Baldwin (D-Wis.), Sherrod Brown (D-Ohio), Tammy Duckworth (D-Ill.), Joni Ernst (R-Iowa), Deb Fischer (R-Neb.), Chuck Grassley (R-Iowa), Amy Klobuchar (D-Minn.), Roger Marshall (R-Kan.), Gary Peters (D-Mich.), Mike Rounds (R-S.D.), and Tina Smith (D-Minn.).

Full letter below:

The Honorable Michael S. Regan

Administrator

Environmental Protection Agency

1200 Pennsylvania Avenue, N.W.

Washington, D.C. 20460

Dear Administrator Regan:

We write to request that the Environmental Protection Agency (EPA) establish robust and expanded renewable volume obligations (RVOs) in its forthcoming “Set” rule under the Renewable Fuel Standard (RFS). Through this rulemaking, EPA will determine blending volumes according to a set of environmental and economic factors in the statute. Strong RVOs will be bolstered by numerous incentives and investments that are poised to increase biofuel blending and further reduce the carbon intensity of these fuels. Additionally, we request that EPA take supportive actions to provide regulatory certainty and afford new opportunities for these homegrown fuels to deepen their contribution to America’s evolving energy landscape. Through this rulemaking, EPA has a historic opportunity to not only reinforce its efforts to restore integrity to the RFS, but chart a new course for biofuels that will help meet America’s diverse energy demands while further decarbonizing numerous sectors of our economy.

Previous RVOs, backed by statutory volumes, established blending requirements for biofuels and sent an important signal to all levels of the renewable fuel value chain. Unfortunately, many of these RVOs were undercut by small refinery exemptions (SREs), and we appreciate EPA affirming the Tenth Circuit’s decision and finding that RFS compliance does not cause  disproportionate economic hardship and that the RFS has a negligible influence on fuel prices. With this matter settled, we hope we can look to the impending Set rule with confidence that future-year RVOs will not be eroded by SREs, but left to stand and maximize EPA’s ability to drive higher utilization of these cleaner fuels.

In setting RVOs for 2023 and beyond, EPA can justify ambitious blending targets by leveraging recently extended and expanded incentive structures, including the second generation biofuel and biodiesel tax credits. As you know, these credits will parallel a new sustainable aviation fuel (SAF) credit before they merge into an emissions-based clean fuel credit. Fuel credits will be complemented by expanded credits to capture and sequester carbon dioxide, including from biofuel production facilities, and additional support for ongoing agriculture production practice improvements, driving more value toward America’s biofuel and farm economies. Together, these credits will incentivize continued low-carbon renewable fuel blending, providing significant value to consumers while maintaining a critical market for our farmers and generating a key source of high-quality animal feed and other value-added co-products.

However, it bears clarifying that new fuels like SAF, as well as other new pathways for RFS compliance, such as electricity generated from biogas that may be proposed for so-called electric renewable identification numbers (e-RINs), must be accommodated in a fashion that is additive to existing fuel technologies and previous blending targets. They must also be subject to the same rigorous transparency, integrity, and lifecycle analysis standards as other renewable transportation fuels. Failure to do so will displace biofuels that have been foundational to decarbonizing the transportation sector, leave additional environmental gains on the table, and hinder industry growth. In order to guard against sidelining decades of investment and the diverse workforce that supports biofuels, we request that EPA set the conventional target above 15 billion gallons, set advanced biofuel volumes that account for increased production capacity of fuels like SAF and renewable diesel, and ensure that RINs for emerging technologies and e-RINs are additive to existing volumes.

EPA can also justify ascending RVOs by recognizing the technological advances made by the biofuels sector and approving long-pending RFS fuel registration applications and pathway petitions. By rendering timely decisions for prospective advanced fuels, including those derived from corn kernel fiber that have already proven their efficacy and safety in states like California, EPA would add value to the bottom line of many biofuel operations and enable them to generate more fuel per bushel of feedstock while further reducing the carbon intensity of each gallon. Similarly, EPA can help scale-up SAF production by addressing in the Set regulatory barriers that deny certain biointermediates entry to SAF. Such actions would permit these biofuel producers to use at scale the investments they have made, access low-carbon markets, and pave the way for the next generation of renewable fuel innovation.

When setting forward-year RVOs, EPA must also consider how record investments in biofuel blending infrastructure will facilitate meeting progressively higher blending targets by making higher blends more readily accessible to consumers. As you know, the U.S. Department of Agriculture (USDA) announced in August $100 million in cost-sharing grants for blending infrastructure such as fuel pumps, dispensers, and storage tanks for blends above E10 and B5 through the Higher Blends Infrastructure Incentive Program (HBIIP). This round of funding follows $5.6 million in funding in April 2022 for blending infrastructure in California, Delaware, Illinois, Maryland, New Jersey, New York, and South Dakota, which EPA projected would “increase the availability of biofuels by 59.5 million gallons per year” across recipient states, as well as over $60 million delivered through other HBIIP awards made since 2020. Increased consumer access to higher blends will also be supported by $500 million for biofuel infrastructure and agriculture product market expansion.

Of course, the most efficient way to promote higher blends is to provide the marketplace the certainty that fuels like E15 may be sold year-round, removing the costly deterrent of fuel switching. The president was correct to ensure uninterrupted sales of E15 during 2022 to provide consumers driving approximately 96 percent of light-duty vehicles a lower-cost fuel option while displacing Russian oil. Even during this time of sustained energy challenges, E15 was sold for as much a 96 cents cheaper per gallon than E10 under the emergency waiver. We encourage EPA to utilize any authority at its disposal to extend year-round E15 into the future. When paired with $2.8 billion in recently announced USDA funding, it would help ensure biofuels are able to maximally contribute to America’s energy and climate needs from field to tailpipe.

In addition to setting robust blending targets, we request that EPA use the Set rulemaking as a timely opportunity to insert greater certainty and efficiency in the regulatory landscape of the RFS. As previously addressed, accurate and standardized lifecycle emissions modeling will not only assign appropriate tax credit values and motivate continued decarbonization of biofuels, but updated lifecycle emissions values also justify growth in RFS volumes to accelerate transportation decarbonization. Contemporary carbon intensity scoring will help settle recurring questions regarding the net environmental benefit of biofuels, permitting stakeholders to readily compare the carbon footprint of biofuels against other technologies. Finally securing reliable, EPA-endorsed lifecycle analysis will encourage increased use of biofuels in domestic low-carbon fuel markets and expand export opportunities to the growing number of countries turning to biofuels to meet their energy needs and climate action goals, such as Canada, India, and Japan. Accordingly, we urge you to culminate the stakeholder engagement conducted via EPA’s public workshop on biofuel greenhouse gas emissions by formally adopting the Department of Energy Argonne National Laboratory’s GREET model for lifecycle analysis in the Set rule.

We agree with you that biofuels are ready to meet the moment and serve as a key element of American energy security, economic opportunity, and climate response. We greatly appreciate the actions and commitments the president provided last spring, which provided an emergency waiver for the sale of higher ethanol blends like E15. Steps like these not only allow for more homegrown ethanol to be sold across the United States in order to increase fuel supply, but they also provide consumers options for more affordable gasoline options at the pump. As such, we urge you to build upon these prior commitments and use the historic opportunity of the Set rule to establish robust forward-year RVOs and take the necessary accompanying regulatory steps to further realize the environmental and economic benefits of our biofuels sector. We look forward to working with you.

Sincerely,

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