NATSO Analysis; EPA Releases Final 2020 Renewable Fuel Mandates

The Final Rule also includes the Agency's plan for "reallocating" gallons of renewable fuel that are waived pursuant to the "Small Refinery Exemption" Program.

The Environmental Protection Agency on Dec. 19 finalized the amount of renewable fuel (such as ethanol and biodiesel) that must be incorporated into the nation's fuel supply in 2020 (and 2021 with respect to biomass-based diesel). The final rule also formalizes the Agency's plan for "reallocating" gallons of renewable fuel that are waived pursuant to the "Small Refinery Exemption" process established under the Renewable Fuel Standard (RFS). 

Both the final renewable volume obligations (RVOs) -- which are outlined in the table below -- and the reallocation process are generally identical to what EPA had proposed earlier this year. From NATSO's perspective, both of these policies, as outlined in the final rule, are insufficient: The RVOs are set well below the levels that the market can meet, and the reallocation process continues to give EPA the flexibility to waive more gallons than it reallocates, which effectively cuts the mandate.


With respect to the reallocation process, NATSO has long argued that the Agency's recent policy of liberally granting "small refinery exemptions" functions as de facto cuts in the renewable fuel mandates. This diminishes the value of investments that thousands of travel centers have made, in response to policy signals, to bring biofuels to market. 

The reallocation process is ostensibly designed to mitigate this outcome by forcing refiners that do not receive exemptions to assume the burden of ensuring that the waived gallons of biofuel are ultimately introduced into the fuel supply. In its comments to EPA, NATSO argued that EPA should not have any discretion to waive more gallons than it reallocates. This is the only way to signal to the market that the Agency will continue to incentivize renewable fuel blending at the levels represented in the RVO. "Given EPA's recent history of secretly, intentionally implementing the RFS in a manner that undermines demand for biofuels, biofuels stakeholders are understandably reluctant to trust EPA to exercise such discretion in a manner that insulates biofuels from the demand destruction associated with small refinery exemptions," NATSO said in its comments to EPA.

The final rule disappointingly did not heed NATSO's recommendations and retained for EPA the discretion to waive more gallons than it reallocates. Although the Agency states that it has every intention of reallocating all waived gallons to avoid de facto mandate cuts, the market is unlikely to trust that EPA will in fact live up to this promise until the Agency begins issuing waivers for compliance year 2019 in early-mid 2020. Once these waivers are issued, the market will begin to assess whether the Agency's reallocation numbers line up with the gallons waived.

Renewable Volume Obligations

In establishing the 2020 RVOs (and 2021 for biomass-based diesel), EPA exercised its waiver authority to lower the volume requirements for cellulosic and total advanced biofuel below the levels that Congress established when it first enacted the RFS more than a decade ago. These final levels, which are outlined in the tables below, represent the quantity of renewable fuel that fuel refiners and importers are responsible for demonstrating have been introduced into the U.S. fuel supply.

As a general matter, NATSO thinks the Agency is obligated by statute to encourage as much renewable fuel blending as possible while remaining cognizant of market realities with respect to how much renewable fuel the market is capable of absorbing. In recent years, NATSO thinks that the RVOs for biomass-based diesel (biodiesel) and total advanced biofuel have been decidedly less ambitious than they could have been. 

The final rule announced on Dec. 19 continues this trend.

In its comments on the proposed mandates filed earlier this year, NATSO urged EPA to "increase the biomass-based diesel (D4) RVO for 2021 to better align with production capacity. (The fact that Congress appears poised to pass a multi-year extension of the biodiesel tax credit buttresses the argument that there is room for mandate growth.)NATSO also urged EPA to "increase the total advanced RVO (D5) for 2020 by at least 500 million gallons to align with the 330 million gallon biomass-based diesel RVO increase (at 1.5 or 1.7 RINs per gallon)" that was included in the already-finalized 2020 biomass-based diesel RVO. The Agency did not heed these recommendations.

As with most RFS rulemakings, there is likely to be litigation from both sides, with biofuels stakeholders arguing that the renewable fuel mandates are too low, and refiners arguing (among other things) that reallocating waived volumes to larger refiners exceeds the Agency's statutory authority. 

NATSO will continue advocating for travel centers' interests on all fuel policy discussions in Washington, D.C., and reporting on any relevant developments. 

Final Volume Requirements



2020 Statutory Volumes

2020 Proposed Volumes

2020 Final Volumes

2021 Final Volumes

Cellulosic biofuel (billion gallons)






Biomass-based diesel (billion gallons)






Advanced biofuel (billion gallons)






Renewable fuel (billion gallons)






a All values are ethanol-equivalent on an energy content basis, except for BBD which is biodiesel-equivalent.

Final 2020 Percentage Standards


Percentage Standards

Cellulosic biofuel


Biomass-based diesel


Advanced biofuel


Renewable fuel


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