EPA Finalizes 2023-2025 RFS Blending Mandates
On Wednesday, the EPA finalized the Renewable Fuel Standard’s (RFS) proposed renewable volume obligations (RVOs) and percentage standards for 2023, 2024, and 2025. EPA will require 20.94 billion gallons of renewable fuel in 2023, 21.54 billion gallons of renewable fuel in 2024, and 22.33 gallons in 2025. Specifically, the final rule set the ethanol mandate at 15 billion gallons across all three years, a reduction from the proposed rule that sought 15.25 billion gallons of ethanol in 2024 and 2025. The good news is that EPA did not include an eRIN proposal which would allow automakers to generate eRINs based on the EVs they sell by establishing contracts with parties that produce electricity from qualifying biogas. The Energy Marketers of America (EMA) argued that the EPA lacked the authority to implement the proposed eRIN credit for renewable electricity because it is inconsistent with the statutory purpose of the RFS, which is to support the production of renewable fuels, not the production and sale of certain vehicle technologies that eRINS are designed to promote. Making automakers RIN generators is a clear attempt to siphon capital away from clean green biofuels to electric vehicles.
Unfortunately, the final rule finalized moderate increases in the biomass-based diesel and overall advanced biofuels for each year, leaving in place the proposed biomass-based diesel volumes of 2.82 billion gallons for 2023. EMA supported an increase in RVOs for biomass-based diesel and overall advanced biofuel volumes given that there is room for growth in that segment. Renewable diesel fuel is the game changer for the energy marketing industry because it has the same ASTM specifications as diesel fuel and can be used in existing underground storage tanks (USTs) and equipment. EMA is still reviewing the final rule and will provide additional details at a later date.
Four separate volumetric standards are required under the RFS program, corresponding to the four separate renewable fuel categories. The final standards are shown below expressed in billion gallons for 2023, 2024 and 2025.
Category
2023
2024
2025
Cellulosic Biofuel
0.84
1.09
1.38
Biomass-Based Diesel
2.82
3.04
3.35
Advanced Biofuel
5.94
6.54
7.33
Total Renewable Fuel (Ethanol)
20.94
21.54
22.33
Supplemental
0.25
n/a
n/a
The renewable fuel standards are expressed as a volume percentage and are used by each refiner and importer of petroleum-based gasoline or diesel fuel to determine their renewable fuel volume obligations. The final standards are shown below express RFS percentage standards.
Percentage Standards for 2023, 2024 and 2025
Category
2023
2024
2025
Cellulosic Biofuel
0.48%
0.63%
0.81%
Biomass-Based Diesel
2.58%
2.82%
3.15%
Advanced Biofuel
3.39%
3.79%
4.31%
Total Renewable Fuel (Ethanol)
11.96%
12.50%
13.13%
Supplemental
0.14
n/a
n/a