Dec 1, 2020
The U.S. EPA has missed its Nov. 30 statutory deadline to set the 2021 renewable volume obligations (RVOs) under the Renewable Fuel Standard, as well as the 2021 RVO for biomass-based diesel. While the delay was not unexpected, representatives of the biofuels industry are expressing frustration that the EPA has, to date, failed to even release an initial proposal for public comment.
Under statute, the EPA is required to finalize annual RFS blending requirements for each compliance year by Nov. 30 of the preceding year. The RVOs for biomass-based diesel are finalized one year earlier. To meet that deadline, a proposed rule is typical released in the spring or early summer, with a public comment period that closes several months before the statutory deadline.
The EPA delivered its proposed rule to set the 2021 RVO and the 2022 RVO for biomass-based diesel to the White House Office of Management and Budget in mid-May. Such proposed rules are typically released for public comment within a month or two. This year, however, OMB review of the proposed rule is still listed as ongoing nearly seven months later.
EPA Administrator Andrew Wheeler briefly addressed the expected delay in setting the 2021 RVOs during a visit to Wisconsin in August. At that time, he said the agency is facing unusual challenges in setting the 2021 RVO due to the COVID-19 pandemic. While the EPA did send a proposed rule to the OMB in May, Wheeler said the agency started work on that rulemaking package before COVID-19 hit. “The entire landscape has changed since then,” Wheeler said at that time, noting both the refining and ethanol sectors have been hard hit by pandemic. He indicated the EPA was still trying to go through all the data to determine what effect COVID-19 will have on the 2021 RVOs. While Wheeler said it did not look like the rulemaking will be completed by its Nov. 30 statutory deadline, he also stressed the rulemaking will also not be two years late.
The EPA did not immediately respond to a request submitted on Nov. 30 seeking information on an updated RFS rulemaking timeline.
The Renewable Fuels Association said it makes more sense at this point to let the upcoming Biden administration handle the 2021 RVO rulemaking. “It shouldn’t come as a surprise to anyone that EPA is missing its statutory deadline for publishing the final rule for 2021 RVOs, given that we still haven’t even seen a proposed rule,” said Geoff Cooper, president and CEO of the RFA. “And even if a proposed rule was released today, it would be next to impossible to have a final rule done by the end of the calendar year, or even by inauguration day. At this point, it likely makes more sense to let the new administration handle the 2021 RVO rulemaking process entirely. President-elect Biden has correctly noted that the RFS waivers granted by the current EPA have ‘severely cut ethanol production, costing farmers income and ethanol plant workers their jobs.’* Thus, we are confident that the new EPA administrator, whoever that may end up being, will stop doing secret favors for oil refiners and ensure the RFS is implemented in a way that is consistent with the law and Congressional intent. We know it may take a few months for the new administration to get a final 2021 RVO rule done, but in the meantime, the statute is crystal clear that refiners must blend at least 15 billion gallons of conventional renewable fuel in 2021. So, while there may be some uncertainty around where the final advanced and cellulosic volume requirements may end up, the marketplace should be able to enter 2021 with some level of confidence around the conventional renewable fuel and biomass-based diesel requirements.”
The American Coalition for Ethanol criticized EPA’s failure to release even a proposed rule before the Nov. 30 statutory deadline. “While we have long understood the fact that EPA would miss the statutory deadline for finalizing the 2021 blending volumes, EPA’s utter failure to even put out the proposal is unacceptable,” said Brian Jennings, CEO of Ace. “Each day that passes with EPA failing to deny pending small refinery exemptions, dragging their feet on the 2021 RVOs, and ignoring the precedent set by the Tenth Circuit Court to rein-in future SREs creates more uncertainty about the future for the ethanol industry that has already suffered too much.”
The National Biodiesel Board is also criticizing the EPA for its delay. “This is absolutely the wrong time for EPA to leave the 2021 RFS rule to write itself,” said Paul Winters, director of public affairs and federal communications at the NBB. “Next year, the agency will have to both establish the annual 2022 RFS obligations and set all RFS volumes for 2023. And at the same time EPA will have to address the misuse of small refinery exemptions and the remand of the 2016 RFS rule.”
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