The Environmental Protection Agency (EPA) on Nov. 23 issued the final volumetric requirements under the Renewable Fuel Standard (RFS) for 2017. EPA also released a final 2018 standard for biomass-based diesel.
Contrary to what many had expected, EPA is requiring the market to meet the 15 billion gallon "conventional" renewable fuel volume that Congress established in 2007. The standard for biomass-based diesel (i.e., renewable diesel or biodiesel) for 2018 grows by 100 million gallons over the 2017 numbers.
More specifically, the 2017 volumetric obligations are as follows:
- Cellulosic biofuel -- 311 million gallons
- Biomass-based diesel -- 2.0 billion gallons in 2017, 2.1 billion gallons in 2018
- Advanced biofuel -- 4.28 billion gallons
- Conventional renewable fuel -- 19.28 billion gallons
For more than a decade, the RFS has required every fuel refiner and importer to generate an increasing volume of renewable fuel annually. These "obligated parties" must attain a particular number of renewable fuel credits, known as "RINs" (Renewable Identification Numbers) to show that they are in compliance with the RFS program. RINs are essentially an artificial commodity that can be bought and sold in an open market.
The program is critical for fuel retailers because many obligated parties are unable to directly generate their mandatory volume of renewable fuel. In these instances, they rely on others to introduce renewable fuel into commerce for them. Many NATSO members do this in a manner than enables them to sell fuel at a lower price and realize greater margins on sales.
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