Renewable Fuel Standard (RFS)

The Renewable Fuel Standard (RFS) is a great American success story. It has helped provide consumers with real choice and savings at the pump while strengthening our economy, delivering greater energy independence, and improving our environment.

The RFS has broad, bipartisan support in Congress, and has injected much-needed competition into the market, ensuring that homegrown fuels can reach consumers at the gas pump since its authorization under the Energy Policy Act of 2005 and expansion under the Energy Independence and Security Act of 2007.

Efforts to repeal or change the RFS would undermine that progress, make the U.S. more dependent on foreign oil, and increase gas prices. Moreover, it is vital that the Environmental Protection Agency continue to meet the statutory biofuel targets set by Congress for annual Renewable Volume Obligations (RVOs), ensuring that America remains a global leader in renewable energy.

Growth Energy’s Vice President of Regulatory Affairs, Chris Bliley, testified during the Environmental Protection Agency’s (EPA) public hearing for the proposed rule, “Renewable Fuel Standard Program: Standards for 2018 and Biomass-Based Diesel Volume for 2019” on August 1, 2017.

Growth Energy’s comments submitted to the EPA on August 31 focused on a number of policies that will ensure the continued progress of starch and cellulosic biofuels under the RFS.

  1. Maintaining the 15-billion-gallon total for conventional biofuels to maintain U.S. energy security and independence
  2. Pushing forward and increasing the cellulosic biofuel volumes to 377 million gallons
  3. Revising the cellulosic waiver credit program to ensure that the volumes being produced are being used in the transportation fuel system
  4. Taking actions to mitigate manipulation in the RIN market

Point of Obligation:

The RFS has worked for over 11 years to ensure that oil companies can’t lock biofuels out of the market, but some oil interests seek to undermine the policy and eliminate competition at U.S. gas stations.

Recently, some refiners have sought to rewrite a key element of the RFS – the point of obligation. Under this proposal, the responsibility of complying with the vision the goals of the RFS would shift from refiners and importers to downstream players such as fuel retailers. The change would impose a major regulatory burden on hundreds – if not thousands – of fuel retailers and distributors, leading to higher consumer costs and fewer renewable options at the pump.

In February 2017, Growth Energy released an expert economic analysis that identified numerous problems associated with changing the RFS point of obligation. This analysis was part of the association’s comments to EPA highlighting how a shift in point of obligation would be detrimental to growing the renewable fuels marketplace and would ultimately undermine an energy policy that has cut oil imports and reduced transportation-related emissions.

Benefits of the RFS:

 

Create jobs and grow the U.S. economy

Thanks to the RFS, ethanol is now blended into 97 percent of our fuel supply, and production of homegrown biofuels supports economic growth across the heartland. In fact, America is a global leader in ethanol production, an industry that supports over 339,000 U.S. jobs and drives nearly $41.2 billion in economic activity.

 

Protect the environment & our air

Ethanol is an earth-friendly biofuel that reduces greenhouse gas emissions by an average of 43 percent, according to the U.S. Department of Agriculture, and this percentage continues to increase with ongoing innovations in technology. Ethanol also protects our health by displacing toxic chemicals in gasoline associated with groundwater contamination, smog, asthma, and cancer.

 

Increase America’s energy security

By providing an affordable alternative for foreign oil, ethanol helps to hold down prices and shields U.S. drivers against efforts by hostile nations to manipulate global energy prices. In fact, ethanol now meets more than 10 percent of our motor fuel needs and has helped America cut our dependence on oil imports in half since 2005, when the RFS was first enacted.

 

Expand fuel options for U.S. drivers

The RFS creates competition at the pump, ensuring that consumers have cleaner, more affordable options when fueling up. As a result, U.S. drivers save money on fuel – as much as $1.50 per gallon during the last spike in global oil prices. Consumers also appreciate that higher biofuel blends can deliver more octane for better performance and help to reduce toxic emissions in the air.

 

Drive investments in research and development

The RFS also stimulates investment in second-generation biofuels that can reduce greenhouse gas emissions by 100 percent or more over gasoline. This technology creates value from the waste portion of crops left in the field, while displacing even more carcinogens in gasoline.

Reid Vapor Pressure (RVP)

Fuel retailers want to offer their customers E15 – a federally approved fuel with 15 percent ethanol and 85 percent gasoline. It is approved for almost 90 percent of American vehicles, can save motorists money and increase a vehicle’s performance. That is why E15 can be found in 29 states, where it is sold at over 800 stations. Growth Energy expects that number to double in 2017, yet many fueling stations are in regions of the country where unnecessary regulations limit sales of E15 during the summer fueling season (June 1 – September 15).

This regulation is tied to Reid Vapor Pressure (RVP) – a measure of how quickly fuel evaporates. In 1990, Congress provided a one-pound RVP volatility waiver to 10 percent ethanol blends because ethanol fuels reduce tailpipe emissions. While the EPA has extended this waiver to blends below 10 percent, the agency has maintained they cannot provide RVP relief for E15.

Enacted before E15 was part of the conversation, the current rules remain hopelessly out of date, barring many drivers from accessing cleaner fuels during summer months when Americans spend the most time on the road.

Growth Energy has led the way along with our retail partners to gain support for legislation to extend the RVP waiver to E15 and ensure American drivers have access to this affordable option year-round. Congress should act quickly to send it to the president’s desk.


Additional Resources

New Legislation Would Extend RVP Waiver, Boost Consumer Fuel Choices During Summer Driving Season

Retail & Cellulosic Leaders Join Growth Energy Push for Senate Action on E15 Fix

Growth Energy Announces Ad Launch for E15 Fix

Growth Energy Statement on the Consumer and Fuel Retailer Choice Act

Growth Energy Discusses Successful Hearing on Consumer and Fuel Retailer Choice Act

Consumer Choice E15 Available Tomorrow as E15 Restrictions End


Higher Blends

Today, ethanol is everywhere you buy gasoline – 97 percent of the fuel sold in the U.S. includes 10 percent ethanol. Increasingly, retailers also offer higher fuel blends, which provide consumers with cleaner, more affordable options at the gas pump. These include E15, a 15 percent ethanol blend, and E85, a blend of up to approximately 85 percent ethanol.

E15 and E85

E15 was unavailable prior to 2011, when the Environmental Protection Agency (EPA) first approved the higher ethanol blend for all conventional light duty vehicles model year 2001 and newer – about nine out of 10 light duty vehicles on the road. Most automakers – including all the “Big Three” U.S. manufacturers – agree and have approved E15 for use in new vehicles. Today, E15 is offered in 29 states, with more locations being added every month thanks in part to our work with industry organizations like Prime the Pump. Prime the Pump is an industry effort that helps fuel retailers with offering higher blends of ethanol, like E15, and E85.

In fact, U.S. ethanol consumption has already surpassed a national average of 10 percent, and demand continues to grow as more retailers seek to market lower-cost, higher-octane options.

To protect this progress, policymakers must uphold a strong Renewable Fuel Standard and work to pull down remaining regulatory barriers at the state and federal level that obstruct the sales of higher ethanol blends. Federal regulations, including fuel economy guidelines, must also be updated to reflect the full environmental, health, and performance benefits of homegrown fuels.

Mid-level Blends (E25-E30)

Study after study shows that ethanol is a proven high-octane fuel that increases engine efficiency and reduces tailpipe greenhouse gas and criteria pollutant emissions.  Growth Energy has been working with federal regulators and the automakers to boost the use of high octane midlevel blends such as E30 for use in the next generation of fuel efficient vehicles.

Growth Energy testified in September during the EPA’s public hearing for the reconsideration of the Final Determination of the Mid-Term Evaluation of Greenhouse Gas Emission Standards for Model Years 2022-2025 Light-Duty Vehicles.


Additional Resources

Growth Energy Urges EPA to Maintain Strong Foundation for Starch Ethanol and Move Cellulosic Forward

New ASTM High-Octane Fuel Standard Published

Growth Energy Files Comments on CAFE/GHG draft Technical Assessment Report


U.S. Exports & Trade

America is the world’s top ethanol exporter, supplying more than one billion gallons of fuel ethanol to our trading partners annually.

These exports provide a vital market for U.S. farmers and help keep America competitive in the global economy. They also serve an important role in nations like China, India, Brazil, Mexico, and South Korea, where U.S. ethanol provides an alternative to toxic gasoline additives and helps to reduce air pollution in areas where air pollution remains a major threat to public health.

Ethanol is the only alternative that can seamlessly and cost-effectively replace fossil fuels in today’s vehicles, and American biofuel producers are ready to meet that demand.

That is why Growth Energy has joined the U.S. Grains Council (USGC) and other allies to hold seminars, establish bi-lateral working groups, and educate foreign policymakers about the demonstrated benefits of ethanol and its value to drivers all over the globe. We also support ongoing efforts to expand U.S. access to foreign markets and reduce the uncertainty associated with fuel policies in other countries.

As part of that effort, we urge the U.S. Trade Representative to work hand-in-hand with our industry to eliminate duties, tariffs, and other protectionist trade barriers that prevent U.S. exports from reaching consumers overseas.

U.S. exports provide a vital market for U.S. farmers and help keep America competitive in the global economy. They also serve an important role in nations like China, India, Brazil, Mexico, and South Korea, where U.S. ethanol provides an alternative to toxic gasoline additives and helps to reduce air pollution in areas where air pollution remains a major threat to public health.

Growth Energy continues to push government stakeholders here in the U.S. and abroad to remove unnecessary tariffs and other barriers to free trade and reopen key export markets for ethanol and DDGS in Brazil, China, and the EU.


Additional Resources

American Biofuels Producers Demand U.S. Government Respond to Brazilian Tariff

U.S. Ethanol Organizations Applaud Mexico’s Adoption of E10

Growth Energy, RFA, USGC submit comments in response to paper on Clean Fuel Standard

Growth Energy Files Comments on Ontario’s Development of Renewable Fuel Standard


Additional Priorities

Ensuring Access to the Marketplace

State regulations have a major impact on the market for ethanol. For example, California alone commands nearly 1.5 billion gallons of ethanol with Californians driving nearly 1 billion miles each and every day. Growth Energy has been a leader in advocacy engagement on California’s Low Carbon Fuel Standard keeping the market open for the last five years for Midwestern starch ethanol.

Growth Energy continues to knock down state and technical barriers to higher ethanol blends. New York is the fourth largest gasoline market in the country, yet it prohibits E15, so Growth Energy has directly engaged working to lift the cap on ethanol in New York gasoline.

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