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Short term RFS fix

Hydrocarbon Engineering,

The following statement was issued by the AFPM in response to EPA’s proposed rule to set the required volumes for the federal methanol mandate in 2014, which recognises and seeks to mitigate the harmful impact of exceeding the E10 blendwall:

EPA’s recognition of the blendwall and the potential adverse effects on consumers is a welcome step, however greater reductions in the biofuel mandate are necessary if consumers are to avoid all the detrimental impacts of the statute. Additionally, EPA’s actions can only be short term in nature and point to the need for Congress to work quickly in addressing the severely flawed and totally outdated RFS.

The RFS requires quantities of biofuel to be consumed that are well beyond the technical limitations of many engines in service today. The vast majority of existing vehicles and infrastructure cannot handle a gasoline supply containing more than 10% ethanol, which leads to what is referred to as the E10 blendwall. Our nation’s gasoline supply is currently maxed out at E10, indicating we have reached this blendwall and cannot use more ethanol without threatening consumer engines and refuelling infrastructure.

In its August 2013 waiver request, AFPM petitioned for a 9.7% cap on ethanol in gasoline and continues to believe that this is the minimum waiver necessary to promote liquidity in the RIN market, retain a supply of pure gasoline required for some engines, and account for historical differences between EIA projections of gasoline demand and actual demand.

‘The fact that EPA must issue a waiver, and will need to continue waiving the ethanol mandate under the RFS in future years, is strong evidence that the program is broken,’ said AFPM President Charles T. Drevna. ‘While we still believe that even further reductions are necessary and warranted, EPA’s proposals acknowledges the adverse consumer impacts associated with the RFS. The basic fact remains that the agency’s action is little more than triage applied to a program that requires legislative surgery,’ Drevna added.

In addition, EPA’s proposed requirement of 17 million gal. of cellulosic biofuel is unrealistic. Even the low end of the proposed range represents more than an 800% increase from the amount of cellulosic fuel that was actually produced in 2013. EPA’s methodology used to predict the volume of cellulosic fuel is flawed in that it incorporates the biased estimated of the cellulosic producers themselves.

‘While we are pleased that EPA has taken steps to avoid the blendwall in 2014, we remain concerned that the proposed rule leaves open the possibility that the biofuel mandates will exceed the maximum amount of ethanol that can be safely added to our gasoline supply. We also remain concerned that the agency continues to set cellulosic biofuel mandates at aspirational levels that are divorced from reality. Consumers should be shielded from the costs of an overly aggressive biofuel mandates an Congress should address this issue immediately before this unworkable law does further damage,’ Drevna continued.

EPA is required by the Clean Air Act to promulgate volumes for 2014 by November 30th, 2013. In 2013, the Agency was nine months late and the rule was made retroactive back to January 1st, causing uncertainty in the transportation fuels market. In addition, EPA was required to set the biomass based diesel volume for 2014 by October 30th, 2012. The Agency will miss this deadline by more than a year. AFPM urges EPA to accelerate its rulemaking process to meet the statutory schedule.

Adapted from press release by Claira Lloyd

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