Source: FARM DOC DAILY, UNIV. OF ILLINOIS, 8/9/17


Three words--inadequate domestic supply--have taken center stage in the implementation of the RFS since 2014. The U.S. Environmental Protection Agency (EPA) used a controversial definition of this term to reduce the (implied) conventional ethanol mandate below statutory levels for 2014, 2015, and 2016. A legal challenge was mounted by biofuels groups and the U.S. Court of Appeals in Washington, D.C. ruled in their favor last week. The ruling is generally being interpreted as requiring only the backfill of the shortfall in the 2016 mandate, but there is some uncertainty in this regard. There are also varying opinions about what form the EPA remedy may take. Here we examine some potential outcomes in terms of additional biofuel requirements for alternative interpretations of the Court ruling and alternative EPA remedies.

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