Source: Lisa M. Keefe, MEATINGPLACE, 5/29/15

The federal Environmental Protection Agency unveiled its proposed volume requirements under the Renewable Fuel Standard (RFS) program for the years 2014, 2015 and 2016.

The EPA’s proposed volumes in three biofuel categories — cellulosic, biomass diesel, and advanced biofuel — are well below those originally mandated in the legislation, but do represent a steady increase in the use of biofuels and ethanol to replace petroleum-based fuels.

The 2014 proposal — originally to have been unveiled 18 months ago — is actual consumption figures, EPA noted in a press release posted on its website. For 2015 and 2016, “After extensive outreach and dialogue with the agricultural community, biofuel producers and the oil and gas industry, EPA is proposing … standards for 2015 and 2016 (and 2017 for biodiesel) that increase steadily over time.”

EPA’s proposed total renewable fuel levels are 15.93 billion gallons of ethanol-equivalent fuel in 2014; 16.3 billion gallons in 2015, and 17.4 billion gallons in 2016.

“This proposal marks an important step forward in making sure the Renewable Fuel Standard program delivers on the Congressional intent to increase biofuel use, lower greenhouse gas emissions and improve energy security,” said Janet McCabe, the acting assistant administrator for EPA’s Office of Air, in the agency’s press release. “We believe these proposed volume requirements will provide a strong incentive for continued investment and growth in biofuels.”

JPMorgan analyst Ann Duignan calculated in a note to investors that the proposed volumes for the 2015-2016 corn marketing year suggest that about 5 billion bushels of corn will be required for ethanol production in the United States. (USDA earlier forecast a need for 5.2 billion bushels of corn for ethanol.) Duignan figured that about 182 million bushels of corn may be added to 2015-2016’s ending stocks, based on current expectations for yield and production.

Response
Responses to the EPA’s announcement were mostly negative, whether the response was from the side of the corn growers and ethanol blenders, who said the projected totals were too small, or the side of the livestock producers, who said the volumes were too high.

“The RFS targets … are an 11.27 billion gallon shortfall over the three years for total biofuels, well below the targets called for by Congress in the law,” the National Farmers Union pointed out in a news release.

NCC President Mike Brown said in a statement that, “ … EPA has mandated the use of approximately 10 billion bushels of corn over the next two years, exacerbating the food-versus-fuel conflict. America's chicken producers are just another drought, freeze or flood away from another crippling year of high feed prices. To date, the RFS has cost the chicken industry more than $50 billion in higher feed costs."

U.S. Senator Debbie Stabenow, ranking member of the U.S. Senate Committee on Agriculture, Nutrition and Forestry, in a brief statement seemed to come down on the side of the corn farmers: “Unfortunately, EPA’s announcement falls short of accomplishing the goals laid out in the Renewable Fuel Standard. The advanced biofuels industry creates thousands of jobs in rural America, all while reducing pollution and reducing our dependency on foreign oil. USDA’s investments in renewable fuel infrastructure will help us meet future Renewable Fuel Standard targets and lay the groundwork for more investments in advanced biofuels. I applaud USDA for supporting producers of renewable energy by getting fuels to consumers at the pump."

EPA will hold a public hearing on this proposal on June 25, in Kansas City, Kan. The period for public input and comment will be open until July 27. EPA will finalize the volume standards in this rule by Nov. 30.

Meanwhile, at USDA ...
Shortly after the EPA's announcement, USDA Secretary Vilsack announced that his agency wil linvest up to $100 million in a Biofuels Infrastructure Partnership to help build "the infrastructure needed to make more renewable fuel options available to American consumers," the ag agency said in a news release.

USDA will administer competitive grants to match funding for state-led efforts to test and evaluate new approaches for marketing higher blends of renewable fuel, such as E15 and E85.

Typical gas pumps can deliver fuel containing a maximum of 10 percent ethano. The new USDA partnership will help support the installation of fuel pumps capable of supplying higher blends of renewable fuel by partnering with states to fund public-private partnerships to test more comprehensive approaches to marketing such blends. The goal is to double the number of fuel pumps capable of supplying higher blends of renewable fuel to consumers.

USDA has also helped jumpstart efforts to provide a reliable supply of advanced plant materials for biofuels. The Biomass Crop Assistance Program (BCAP), for example, provides incentives to more than growers and landowners to establish and produce dedicated, non-food energy crops for delivery to energy conversion facilities.

For more stories, gwww.meatingplace.com.