The Environmental Protection Agency (EPA) said it will require 19.92 billion gallons of biofuel to be blended into the nation’s fuel system under its 2019 Renewable Fuel Standard (RFS). But in issuing the numbers, the agency failed to address NATSO’s concerns about its practice of issuing small refinery waivers that exempt small refineries from their obligations under the RFS — even small refineries that are owned by profitable refining entities such as Andeavor.
“We are happy with the bump in the advanced biofuel volumes but the increase is meaningless if the additional volumetric obligations are just going to be waived,” said NATSO Vice President of Government Affairs David Fialkov. “Small refinery waivers fundamentally undercut the entire intent of the RVO process by lowering demand for biofuels and diminishing the value of the investments that many NATSO members have made.”
The final rule will increase the 2020 requirement for biodiesel to 2.43 billion gallons, up 330 million gallons from the 2.1 billion gallons required this year and in 2019. Biodiesel volumes are set a year in advance of the other biofuels.
Advanced biofuel volumes increased to 4.92 billion gallons for 2019, up from 4.29 billion gallons in 2018. The rule also increased cellulosic biofuel requirements to 418 million gallons, up from 288 million gallons this year and marking an increase over the 381 million gallons over the June proposal. Conventional ethanol volumes were kept at 15 billion gallons.
NATSO is supportive of the approach EPA has historically taken and continues to take in establishing the RVOs. However, NATSO thinks that EPA needs a transparent process to guide its assessment of small refinery waiver requests to ensure that such exemptions don’t continue to undermine the law’s intent and decrease demand for biofuels.
EPA has the authority to grant waivers exempting small refineries from their obligations under the RFS if they can prove that it would cause them a disproportionate economic hardship. In 2018, EPA issued more than 50 retroactive waivers -- an unprecedented number -- including to some of the nation’s biggest refiners.
EPA is only allowed to grant waivers for refineries producing less than 75,000 barrels per day that can demonstrate a disproportionate economic hardship, yet in early April the agency exempted Andeavor, which posted net profits of $1.5 billion last year and is one of the nation’s largest oil refining companies. The exemption released the company of its obligation to provide EPA with the biofuels credits that show it has complied with the RFS.
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