Advanced Ethanol Council Pushes Back on Oil: Industry RFS Retroactive Waiver Request?
Sunday, February 19th, 2012
America's advanced and cellulosic ethanol producers today reiterated their strong belief that the U.S. Environmental Protection Agency (EPA) should not grant a retroactive waiver to the oil industry for the cellulosic requirements under the Renewable Fuel Standard (RFS) in 2011.
Writing to EPA, Advanced Ethanol Council Executive Director Brooke Coleman made very clear that Congress anticipated potential shortfalls in cellulosic ethanol production in the early years and created a mechanism, with the blessing of petroleum interests, to address such a situation.
"We are well‐aware that the commercialization of cellulosic biofuels is behind the schedule set forth by the federal RFS. However, Congress anticipated the inevitable uncertainties and variability inherent with the commercialization of new technologies and set up a credit waiver system to account for variances from the established schedule for advanced biofuels," wrote Coleman.
Oil industry associations, such as American Fuel & Petrochemical Manufacturers (AFPM) (formerly NPRA), the American Petroleum Institute, and the Western States Petroleum Association have asked EPA to retroactively waive the 2011 cellulosic ethanol requirements under the RFS as no reported volumes of cellulosic ethanol production were reported. Coleman pushed back noting that the purpose of the RFS was to be forward-looking and drive the commercialization of new renewable fuel technology. Moreover, Coleman notes, oil interests and other obligated parties have multiple options available to them to comply with RFS mandated volumes.
"Petitioners seem to misunderstand the purpose of the federal RFS," wrote Coleman. "The RFS was enacted to be forward‐looking, and to drive the production and use of renewable fuels to mitigate the severe economic and environmental impacts of foreign oil dependence."
Coleman continued, "This is the reason why the RFS requires U.S. EPA to forecast the capacity of the cellulosic biofuel industry in out years and implement flexibility provisions in the event that the targets are not hit, as opposed to simply setting the standard to reflect the market that already exists. This forward‐looking element of the program provides a critical market signal to obligated parties to secure cellulosic biofuel gallons when available, instead of avoiding off‐take agreements and stalling the program. Retroactive adjustments to the volumetric requirements would, in essence, short‐circuit this market signal and slow the development of our industry."
Coleman urged EPA to continue to enforce the RFS volumes it sets each November for the following year as well as the credit provisions that were established at the urging of the oil industry and other obligated parties.
"U.S. EPA has crafted and implemented a credit waiver program that finds the right balance between the clear Congressional intent to drive innovation in the transportation fuels marketplace while avoiding placing undue burden on obligated parties. Cellulosic biofuel technology is ready and cellulosic ethanol producers are starting to break through commercially in very difficult economic times. Consistent and reasonable implementation of the RFS is the key point of stasis in the marketplace that will allow the vision embodied by the federal RFS to become a reality," concluded Coleman.
Renewable Fuels Assn news release