Imminent Legislation

According to Biomass Magazine, the Biden administration will issue a notice of proposed rulemaking to establish post-2022 Renewable Fuel Standard regulations before the end of 2021.  A proposed rule to set annual RFS renewable volume obligations (RVOs) for 2021 and 2022 is expected to be released this month.  In

December of this year, a separate notice of proposed rulemaking will address the future of the RFS program. The Clean Air Act governing the RFS provided target RVOs through 2022. For years 2023 and later, the EPA must set those targets.

Historical Review

Those in the alternative fuel industry that live and breathe the RFS program are aware of its size and complexity, but a brief historical review may be helpful.
The renewable fuel standards program (RFS) was created under the Energy Policy Act of 2005 and was expanded in 2007 under the Energy Independence and Security Act. The program is intended to publish new standards each year, gradually raising the percentage of renewable fuel in blends for transportation.

The RFS program is managed by Environmental Protection Agency. It is economically very important for users along the RNG pipeline and supply chain. Companies in the various energy markets are very familiar with RVOs (renewable volume obligations) and RINs (renewable identification numbers) and their importance under the RFS legislation.

Beginning in 2015, the program capped the amount of conventional biofuel (corn starch based) allowed and increased the requirement for advanced biofuels (example feedstocks: sugarcane, biobutanol, bionaphta.) The advanced biofuel requirement increases over time from approximately 7% of the total renewable fuel requirement in 2010 to 58% of the total renewable fuel target in 2022.

Implications

Since 2014, the standards set out by the RFS program pertaining to the percentage of advanced biofuels in fuels has not been met, due in part to limited present and future production of such fuels. Which means, biofuel should, theoretically, be in high demand to those looking to meet the RFS requirements..

Congressional Research Service April, 2020 paper “The Renewable Fuel Standard (RFS): An Overview,” theorizes, “The statutory language does not mandate the production of biofuels; rather, it mandates the use of biofuel. However, it could be argued that it is difficult to use a fuel that is not being produced and that the RFS therefore indirectly creates a demand for certain biofuels and thus stimulates their production.”

Market indicators point to an expansion of alternative energy and fuels. Whether you’re a seasoned supplier along the RNG pipeline, are new to the industry or are considering entering the market, a clear understanding of the impact the RFS program will have on your business is essential. Leveraging technology and partnerships along the supply chain is, as well. CMD Alternative Energy Solutions provides a full array of fueling equipment customizable for specific RNG applications, and full service, training and 24/7/365 station monitoring and assistance.

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