The Environmental Protection Agency (EPA) on Sept. 26 announced that it was seeking public comment on a new approach to establishing renewable fuel mandates under the Renewable Fuel Standard (RFS): Only considering domestic production capacity. If EPA ultimately adopts this new approach, it will substantially lower retailers' incentives to incorporate renewable fuels into their fuel supply. NATSO opposes this policy shift, and in comments it will file with the Agency will urge EPA to recognize that there is a global market for renewable fuels, such as biodiesel, and that the RFS should accommodate fuels regardless of where they are produced.
David Fialkov, NATSO's Vice President of Government Affairs said that this likely portends a dramatic, though somewhat predictable shift in policy.
In a statement issued to media, NATSO said it was disappointed that EPA appears to be laying the groundwork to substantially lower the renewable volume obligations far below the levels it proposed just several weeks ago. Those levels were perfectly attainable, NATSO said, and if finalized would result in greater consumption of renewable fuels in the United States and lower prices for consumers.
"It is unfortunate that EPA seems inclined to rely on flawed legal arguments to justify undercutting what has thus far been a largely successful policy," said Fialkov.
In asking for public input, EPA specifically referenced the expiration of the biodiesel tax credit at the end of 2016, as well as trade cases limiting biodiesel imports from Argentina and Indonesia, as factors that could limit the supply of biodiesel in the United States.
Relying on what NATSO considers to be flawed interpretations of relevant statutes and a recent court case, EPA is considering using these policy and market developments as a rationale for lowering renewable fuel mandates.
"Although NATSO has long argued that EPA must recognize the effect that these policies have on renewable fuels markets, at this point it is simply not necessary to lower RVOs beyond what the Agency proposed just a few weeks ago," Fialkov said. "EPA should respond to market realities, not dictate them."
EPA will be seeking public comment on this issue until mid-October, and is expected to reach a final determination on 2018 volume mandates by November 30.
For more information on this issue, click here.
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