February 09, 2010

EPA Sets Renewable Fuels Standard

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WASHINGTON - President Barack Obama on Feb. 3 announced steps aimed at accelerating the development of biofuels, and the Environmental Protection Agency issued its final rule setting a new renewable fuels standard. 

The EPA projected that by 2022, the new fuel standard will increase farmers' incomes by $13 billion annually, help stabilize prices at the pump, and increase U.S. energy independence. 

The EPA said that ethanol and other renewable fuels must represent 8.25 percent of total gasoline and diesel sales in 2010 to meet Congress' mandate that nearly 13 billion gallons of renewable fuels be produced this year. That's lower than last year's 10.21 percent renewable fuel standard that the EPA announced in November 2008, Reuters reported. These rules are separate from those regulating the amount of ethanol allowed to be blended into each gallon of gasoline, which is in most cases 10 percent. 

The renewable fuels standard was mandated in the 2007 energy bill. 

Unlike a previously proposed version of the rule, the final rule confirms that high-efficiency corn ethanol plants will meet the fuel standard. EPA Administrator Lisa Jackson said during the press conference that changes to the greenhouse gas modeling found that all biofuel classes meet the renewable fuel standard's greenhouse gas reduction goals. New calculations found that ethanol can have a smaller carbon footprint than gasoline. 

"On crop productivity, the data we used [previously] was not right," Jackson explained. In addition, the EPA's new methodology took a different approach in factoring in coproducts, and indirect land-use modeling took into account 120 nations -- well beyond the initial 40 nations included earlier. As a result, the numbers changed dramatically. Corn ethanol, based on the updated modeling, meets the 20-percent greenhouse gas reduction requirement for it to be considered a conventional biofuel. (An advanced biofuel must meet a 50-percent reduction requirement.)