EPA Proposes Renewable Volume Obligations for 2020, 2021, and 2022

The Environmental Protection Agency (EPA) proposed on Dec.7 renewable volume obligations (RVOs) for 2020, 2021, and 2022 under the Renewable Fuel Standard (RFS).

The Environmental Protection Agency (EPA) proposed on Dec.7 renewable volume obligations (RVOs) for 2020, 2021, and 2022 under the Renewable Fuel Standard (RFS). EPA also proposed RVOs for biomass-based diesel (BBD) for 2021, 2022, and 2023. In the proposal, EPA said it would use its waiver authority to lower the volumes below the statutory targets.

EPA’s RVOs and percentage standards are as follows, with 2016, 2017, 2018, and 2019 final volumes and percentage standards listed for reference (the previously finalized volumes/percentages are shaded; newly finalized volumes/percentages are not shaded):   

In the proposed rule, EPA notes the “shortfall in RIN generation in 2020, uncertainty regarding [small refinery exemptions] following the Tenth Circuit’s decision, and the hurdles those may present to obligated parties’ compliance.” EPA therefore proposes to use its reset authority to adjust the 2020 volumes to match the actual volumes consumed. In addition, EPA proposes to use its waiver authority to set the blending requirements for 2021 and 2022 and has adjusted the volumes accordingly.EPA modified the formulas used to calculate the percentage standards to account for a projection of exempt gasoline and diesel volumes produced by small refineries, resulting in a range of percentage standards.

The proposed RVOs will likely cause serious consternation in the ethanol industry. It is unclear how the market will respond to the proposal, but as a general matter, NATSO appreciates that EPA took care to avoid the blend wall while still allowing for ambitious growth-oriented policies to encourage investment and consumption of those biofuels that are most beneficial to the environment.

NATSO is analyzing the proposed rule and will provide members with additional information in the coming days. Comments are due Feb. 4, 2021, and NATSO will file comments on the proposal.

EPA Proposed Rule 

EPA Proposed Rule Summary 

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