Will The EPA Announce The 2014 RFS Sometime This Year?

  • Tuesday, 11 November 2014 00:00

With the mid-term elections done and dusted, will the EPA finally release its final rule for the 2014 Renewable Fuel Standard (RFS)?

Lest the agency forget, there are seven weeks left in 2014 and one would think that it would probably be best if the 2014 Renewable Volume Obligations (RVOs) under the RFS are actually released before 2014 is over (talk about tardiness).  

But perhaps a bigger question is whether it even matters at this point?

With under two months to go, even with the absence of a final rule on the RFS, the ethanol industry has continued to grow. Indeed, based on the EPA's Renewable Identification Number (RIN) data as of end-September, a total of 10.68 billion RINs have been generated with 10.44 billion RINs generated for ethanol.

RINs are assigned to every gallon of renewable fuel produced or imported which means that 10.44 billion gallons of ethanol has been produced over a nine-month period this year.

If we were to annualize that figure, total ethanol produced this year could clock in at 13.92 billion gallons (this is on the assumption that ethanol production continues at the same rate for the last three months of the year).

In May, Reuters, citing unidentified biofuel industry sources, reported that the EPA's new RVO for ethanol in 2014 was 13.6 billion gallons. To recap, in November last year, the EPA originally proposed setting the 2014 RVO for ethanol at 13.01 billion gallons instead of 14.4 billion gallons as originally stipulated in the RFS. 

Announcing the 2014 RVO figures at this stage will have little or no impact on the industry. In that sense, it probably doesn't matter if the EPA were to make the announcement at 11:59 pm on Dec 31, 2014. 

But this isn't to suggest the RFS isn't important to the biofuels industry. On the contrary, without the RFS, we wouldn't be where we are today. The fact that two cellulosic facilities commenced production this year (with several more now planned) is a result of the RFS. We use less foreign oil, pay cheaper prices at the pump, breathe cleaner air and have a stronger rural economy because of the RFS. And while the EPA may have pushed the 2014 RFS to the back burner, the agency needs to announce the 2015 RFS immenently if the industry is to continue progressing for years to come.