BIO Comments on Renewable Fuel Standards for 2017

Introduction: Despite EPA staff’s efforts, EPA’s proposed rule is subject to major errors and flaws. The proposed 2017 volume requirements should be adjusted to address those problems.

OVERVIEW OF KEY POINTS

We appreciate EPA staff’s diligent efforts to implement the RFS program despite political challenges. At the same time, we are compelled to note that the agency’s interpretation of the relevant statutory provisions is inconsistent with the Clean Air Act ("CAA"). Relatedly, the agency’s interpretation makes it impossible to estimate the fuel volume requirements that the agency is likely to set for any particular year, undermining the investments that are essential to achieving Congress’s intent. BIO urges EPA to get the RFS back on track with a commitment to stable implementation of the program that tracks statutory requirements.

In addition, BIO respectfully submits that EPA can and should improve upon the proposed rule in a number of other respects – and should do so even if EPA were to hold to its interpretation of the statute as set forth in the proposed rule. In particular, we urge EPA to account more appropriately for the availability of advanced and other biofuels to meet statutory volume requirements, and to make significant changes to EPA’s proposed reductions in volume requirements for advanced biofuel, cellulosic biofuel, and total renewable fuel.

Key elements of BIO’s comments are as follows:

1. We continue to disagree with EPA’s invocation of its general waiver authority. But assuming for purposes of discussion that EPA adheres to its position on this issue, EPA should set 2017 RVOs at significantly higher levels than the levels that are described in the proposed rule. Even under EPA’s theory of its statutory authority, EPA should set 2017 RVOs at the highest levels feasible, to comply with the statutory requirements and to further Congress’s intent. Under EPA’s theory of the statute, EPA’s proposed reductions in RVOs for 2017 are, as a general matter, too steep, and would unnecessarily destabilize the RFS program.
2. Subject to EPA’s receipt of additional information that may warrant further increases, EPA should set the advanced biofuel RVO for 2017 at more than 4.6 billion gallons, and the total renewable fuel RVO for 2017 at more than 19.6 billion gallons. These numbers are calculated without taking into account the potential availability of carryover RIN credits (as noted immediately below), and therefore are almost certainly lower than the actual numbers that should be used by EPA in setting the advanced biofuel and total renewable fuel RVOs for 2017.
3. In setting the volumes, EPA should take into account the availability of carryover Renewable Identification Number ("RIN") credits, and should not exclude them from its calculation of available domestic supply to be used in satisfying statutory volume requirements. The availability of RIN credits thus almost certainly requires increasing the numbers described above.
4. Even under EPA’s theory of its statutory authority to waive volumes, EPA has no need to trigger the first step of a potential two-step "reset" (or "off-ramp") process for reassessing volumes, as described in 42 U.S.C. § 7545(o)(7)(F). Initiating such a reset process would be deeply destabilizing to the program, and is not required at this time.