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EPA Proposes Rule for Renewable Fuel Standard

May 05, 2009

WASHINGTON, D.C. --- The U.S. Environmental Protection Agency on Tuesday, May 5, proposed a new renewable fuel standard that may ultimately prohibit some corn ethanol production processes because of their level of greenhouse gas emissions. 

The goal of the standard is to bolster the nation's supply of renewable fuels, poised to reach 36 billion gallons by 2022, as mandated by the Energy Independence and Security Act of 2007. 

According to Dow Jones Newswires, the EPA proposal spells out two different emission scenarios for a range of biofuels and production methods. One scenario generally favors the ethanol industry, while the other would prohibit all but one corn ethanol production process but accelerate alternatives such as cellulosic biofuels. 

According to analysts interviewed by Dow Jones Newswires, the EPA's approach, which doesn't favor one scenario over the other, buys the Obama administration time for a special biofuels inter-agency group to review and make recommendations on the proposed scenarios. 

"EPA has done yeoman's work in developing the framework upon which the expanded Renewable Fuels Standard (RFS) will be implemented," said Renewable Fuels Association President and CEO Bob Dinneen. "The success of the RFS to the nation's economic, environmental, and energy well-being is too important to risk getting wrong. We commend EPA staff for the hard work they have put into this rulemaking and look forward to working with them to improve upon the analysis in the months to come." 

The Renewable Fuels Association represents the ethanol industry. 

One source of controversy is how projected land-use change and its environmental impact should figure in setting renewable fuel policy. Many environmental groups are at odds with ethanol industry groups on this issue. Industry representatives question the accuracy of prevailing methods for calculating such impact.

The EPA said the Energy Independence and Security Act will establish four categories of renewable fuels: cellulosic biofuels, biomass-based diesel, advanced biofuels and total renewable fuel. In 2022, the proposal would require 16 billion gallons of cellulosic biofuels, 15 billion gallons annually of conventional biofuels, 4 billion gallons of advanced biofuels and 1 billion gallons of biomass-based diesel. 

To reach the volume requirements, each year EPA will calculate a percentage-based standard that refiners, importers and blenders of gasoline and diesel must ensure is used in transportation fuel. For the first time, some renewable fuels must achieve greenhouse gas emission reductions compared to the gasoline and diesel fuels they displace. Refiners must meet the requirements to receive credit toward meeting the new standards, EPA said.

The thresholds for new categories would be 20 percent less greenhouse gas emissions for renewable fuels produced from new facilities, 50 percent less for biomass-based diesel and advanced biofuels, and 60 percent less for cellulosic biofuels.

EPA also will conduct peer-reviews on the lifecycle analysis of the four renewable fuel categories. Lifecycle refers to the greenhouse gas emissions over the life of the fuels.

The 60-day comment period on this proposal will begin upon publication in the Federal Register. During the comment period, EPA will hold a public workshop on lifecycle analysis. 

"As we work towards energy independence, using more homegrown biofuels reduces our vulnerability to oil price spikes that everyone feels at the pump," EPA Administrator Lisa P. Jackson said. "Energy independence also puts billions of dollars back into our economy, creates green jobs, and protects the planet from climate change in the bargain." 

The proposal would allow existing corn ethanol facilities to be grandfathered in, Dow Jones Newswires reported, but also prohibit some corn ethanol production processes such as the "dry gas mill" and "coal dry mill" methods. These restrictions would provide greater market incentive for advanced biofuel technologies such as sugarcane ethanol. To be considered an advanced biofuel, the fuel type must have greenhouse gas emissions that are at least 50 percent lower than those associated with ordinary gasoline. New biofuel plants must produce fuels with emissions that are at least 20 percent lower.

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