The proposed 2014 rule ran into a steamroller of opposition from renewable fuel groups, who said the proposed rule substantially cutting biofuels targets “pulled the rug” from underneath billions of dollars investment made in reliance upon targets.

The EPA Statement

The Agency said:

“Today EPA is announcing that it will not be finalizing 2014 applicable percentage standards under the Renewable Fuel Standard (RFS) program before the end of 2014. In light of this delay in issuing the 2014 RFS standards, the compliance demonstration deadline for the 2013 RFS standards will take place in 2015.

“EPA will be making modifications to the EPA- Moderated Transaction System (EMTS) to ensure that Renewable Identification Numbers (RINs) generated in 2012 are valid for demonstrating compliance with the 2013 applicable standards.”

The Agency adds:

“On November 29, 2013, EPA published a notice of proposed rulemaking to establish the 2014 RFS standards. The proposal has generated significant comment and controversy, particularly about how volumes should be set in light of lower gasoline consumption than had been forecast at the time that the Energy Independence and Security Act was enacted, and whether and on what basis the statutory volumes should be waived. Most notably, commenters expressed concerns regarding the proposal’s ability to ensure continued progress towards achieving the volumes of renewable fuel targeted by the statute.

“EPA has been evaluating these issues in light of the purposes of the statute and the Administration’s commitment to the goals of the statute to increase the use of renewable fuels, particularly cellulosic biofuels, which will reduce the greenhouse gases emitted from the consumption of transportation fuels and diversify the nation’s fuel supply.

“Finalization of the 2014 standards rule has been significantly delayed. Due to this delay, and given ongoing consideration of the issues presented by the commenters, EPA is not in a position to finalize the 2014 RFS standards rule before the end of the year. Accordingly, we intend to take action on the 2014 standards rule in 2015 prior to or in conjunction with action on the 2015 standards rule.»

The complete EPA announcement is here.

Industry Reaction

Jim Greenwood, President and CEO, BIO

“We appreciate that EPA will not be finalizing a proposed 2014 RFS rule containing a flawed methodology for setting the renewable fuel volumes. We will continue to work with the agency to get this successful program back on track as soon as possible.

“The RFS supports companies that invest in, build and start up new advanced and cellulosic biorefineries here in the United States. It’s clear that the advanced biofuel industry has made rapid strides to increase production capacity to meet the annual volume requirements. Unfortunately, the delay in this year’s rule already has chilled investment and financing of future projects, even as first-of-a-kind cellulosic biofuel plants are right now starting up operations. The industry needs a final rule that is legally appropriate and continues to support our efforts.”

Michael McAdams, President, Advanced Biofuels Association

“Today, EPA hit the big reset button.  Given the fact that we are already at the end of 2014, we appreciate EPA’s recognition that the real importance is to set the program on a clear glide path for 2015 and 2016. The numbers do matter, and utilizing the actual production will be a positive step from what was a proposed. We appreciate how EPA recognized that cutting requirements for advanced biofuels would be a mistake. This emerging industry deserves better considering it has already demonstrated the capacity to generate 3.2 billion gallons of advanced biofuel annually. But, at least EPA’s decision leaves the glass more than half full and allow us to get back on track next year.

“We are hopeful that this resets the bar to allow EPA to release 2015 numbers as quickly as possible and give certainty to the program. It has been the uncertainty that has created issues for the advanced and cellulosic sectors to move forward.

“Congress intended the RFS to improve America’s energy security by fostering development of the next generation of cleaner, more sustainable biofuels. Considering EPA is nearly a year late, which has left the air of uncertainty around the program, perhaps it is time for lawmakers to take a fresh look at whether the program is meeting expectations and following Congress’s desired goal of creating an advanced and cellulosic industry.”

Anne Steckel, Vice President of Federal Affairs, National Biodiesel Board

“This Administration says over and over that it supports biodiesel, yet its actions with these repeated delays are undermining the industry. Biodiesel producers have laid off workers and idled production. Some have shut down altogether. We know that fuels policy is complex, but there is absolutely no reason that the biodiesel volume hasn’t been announced. We are urging the Administration to finalize a 2014 rule as quickly as possible that puts this industry back on track for growth and puts our country back on track for ending our dangerous dependence on oil. We also urge them to move quickly on 2015 so that we don’t repeat this flawed process again next year.”