The current renewable fuel standard (RFS1) was adopted by the EPA in order to implement the Energy Policy Act of 2005. EISA, which was signed into law two years later, required the agency to expand and revise the current program. The EPA was originally scheduled to issue a final rule for RFS2 by Jan. 1, 2009, but announced in July 2008 that the rulemaking would be delayed due to complex new elements that EISA added to the program. Nearly one year later, the agency was finally able to complete its proposal.
In addition to increasing the renewable fuel mandate from 7.5 billion gallons by 2012 to 36 billion gallons by 2022, EISA also specified other changes to the RFS program. These
changes are reflected in the EPA’s proposed rule for the RFS2.
As directed by EISA, the proposed rule specifies four unique categories of renewable fuel, each with its own respective mandate. In order to generate renewable identification numbers (RINs) that are used by obligated parties to meet these mandates, renewable fuels must meet certain baseline carbon reduction thresholds and must be manufactured from feedstock meeting the definition of renewable biomass. In addition, the RFS2 program has been expanded to include diesel and non-road fuels. The proposed rulemaking also outlines several changes to the RIN program, which will be detailed in the September issue of EPM.
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Fuel Categories
The proposed rule specifies four categories of renewable fuel: cellulosic biofuel, biomass-based diesel, advanced biofuel and total renewable fuel. Each of the four categories has a unique greenhouse gas (GHG) emissions reduction threshold that the fuel must meet in order to qualify for the RFS2 program.
A fuel’s life-cycle GHG emissions are defined as the aggregate emissions attributed to all components of fuel production and use, including feedstock production and distribution, fuel production, delivery, use and significant indirect emissions from land use change. The full life-cycle emissions level of a particular fuel is measured against a baseline fossil fuel in order to determine its GHG emissions reduction threshold.
Cellulosic biofuel is defined as any renewable fuel – not necessarily ethanol – that is derived from cellulose, hemicelluloses or lignin. In order to qualify as cellulosic biofuel, the renewable fuel must achieve a life-cycle GHG emission-reduction threshold of 60 percent.
Advanced biofuel is defined as a renewable fuel other that ethanol derived from cornstarch. The advanced biofuel category can apply to a variety of fuels, including biomass-based diesel, biogas, butanol or other alcohols and fuels derived from cellulosic biomass. This may include ethanol derived from cellulose, hemicelluloses, lignin, sugar or any starch other than corn starch. Both advanced biofuel and biomass-based diesel must achieve a life-cycle GHG emission-reduction threshold of 50 percent.
Additional fuel used to meet the total renewable fuel mandate is required to meet a 20 percent GHG-reduction threshold. The majority of this fuel is expected to be corn-based ethanol. Although new corn-based ethanol plants will be required to meet this reduction threshold in order to generate RINs, the proposed rule includes a component that allows many existing plants to be grandfathered. Under the proposed rule, any renewable fuel facilities that commenced construction on or before Dec. 19, 2007, as well as facilities that commenced construction in 2008 or 2009 and are fired with natural gas, biomass, or a combination thereof, are grandfathered. “We expect that a significant number of facilities out there would be grandfathered, and very likely the majority of them out there would be grandfathered,” says EPA Senior Policy Advisor Paul Argyropoulos. From a volume perspective, he says the EPA is expecting to grandfather approximately 15 billion gallons of ethanol production, and possibly more.
It is important to note that while EISA limits the participation of corn-based ethanol in the RFS2 to 15 billion gallons, there is not a mandated volume for corn-based ethanol. Excess RINs from cellulosic biofuel, biomass-based diesel and advanced biofuel can be used to meet total renewable fuel mandates in place of corn-ethanol RINs, Argyropoulos says. “Any of the compliant fuels can count toward the total renewable fuels standard.”
Definition of Renewable Biomass
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