The Trump administration on Wednesday proposed to lower the amount of renewable fuels that must be blended into the nation’s gasoline supply next year, saying “market realities” have informed its decision and leaving the door open for a much broader overhaul of the entire Renewable Fuel Standard in the near future.
In a highly anticipated announcement, Environmental Protection Agency Administrator Scott Pruitt said the decision was made because of difficulties in getting more advanced biofuels to market.
“We are proposing new volumes consistent with market realities focused on actual production and consumer demand while being cognizant of the challenges that exist in bringing advanced biofuels into the marketplace,” Mr. Pruitt said.
The new standard, which must be finalized by November and is subject to change until then, would require a total to 19.24 billion gallons of renewable fuels be blended into gasoline nationwide. Of that, the agency will require that 15 billion gallons of conventional corn-based ethanol be used, a number that’s unchanged from the 2017 figure.
But the EPA lowered the target for more advanced biofuels products, dropping from 4.28 billion gallons this year to 4.24 billion gallons next year.
For cellulosic biofuels, the agency wants to lower the target from 311 million gallons this year to 238 million next year. The EPA also is making a minor change to the biomass-based diesel standard, proposing to raise it from 2 billion gallons in 2017 to 2.1 billion in 2018.
The annual mandates are the result of the RFS, legislation passed by Congress and signed into law by then-President George W. Bush calling for increasing amounts of ethanol and other biofuels to be used in gasoline each year. The actual numbers required by EPA consistently have been lower than what the legislation envisioned; the 2018 total renewable fuels figure is about 26 billion gallons lower than what was originally called for in the 2007 bill, for example.
Wednesday’s decision is the first clue as to which way the administration could be leaning on ethanol. Mr. Pruitt has been an outspoken critic of the RFS, while President Trump was a vocal supporter of ethanol throughout his presidential campaign.
The move to lower the standards could indicate Mr. Pruitt plans on conducting a more thorough overhaul of the RFS, though lasting changes would require action from Congress.
The reaction from the ethanol industry and ethanol champions on Capitol Hill was mixed. Sector leaders praised the EPA for maintaining the 15 billion-gallon standard for conventional ethanol but criticized the administration for lowering the targets for advanced biofuels.
“EPA’s proposal misses an opportunity to drive U.S. leadership in cellulosic fuels and create new economic opportunities across the heartland,” said Brooke Coleman, executive director of the Advanced Biofuels Business Council. “Advanced and cellulosic biofuels are the future of the RFS. If finalized, reductions to those targets — however small — will only pull us off the path toward American energy dominance.”
The Renewable Fuels Association, the ethanol industry’s leading trade group, said the overall proposal is a positive step.
“We believe EPA’s proposal continues our nation on the path of further success for the program and ensures the future growth of ethanol, the cleanest, lowest cost and highest source of octane on the planet,” said Bob Dinneen, the group’s president and CEO.
Sen. Charles E. Grassley, an Iowa Republican who represents a state that’s benefited greatly from the explosion of corn-based ethanol, called the proposal “a mixed bag.”
“While I’m glad the EPA’s proposal holds steady the requirement of 15 billion gallons for conventional ethanol, the lack of any increase for biodiesel is a missed opportunity,” the senator said in a statement. “The proposal fails to recognize the ability of the domestic biodiesel industry to produce at much higher levels. The proposed cut to advanced and cellulosic fuels will have a chilling effect on the push toward next generation biofuels, and will certainly harm investments in this area.”