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 among state leaders. It has injected much-needed competition into the market, ensuring that homegrown fuels can reach consumers at the fuel pump since its enactment under the Energy Policy Act of 2005 and expansion under the Energy Independence and Security Act of 2007.
Benefits of the RFS
Create jobs and grow the U.S. economy
Thanks to the RFS, ethanol is now blended into 98 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 365,000 U.S. jobs and added nearly $44.4 billion to the nation’s gross domestic product.
Protect the environment & our air
Ethanol is an earth-friendly biofuel that reduces greenhouse gas emissions by an average of 39 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.
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 (EPA) 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.
On July 5, 2019, EPA released the its proposed renewable volume obligations (RVOs) for 2020. Under the proposal, conventional ethanol would hold steady at 15 billion gallons, while advanced biofuels would see a slight uptick to 5.04 billion gallons, including 540 million gallons of cellulosic biofuel. Biodiesel targets, which are set two years in advance, were proposed at 2.43 billion gallons for 2021.
The RFS has worked for over 11 years with gasoline refiners and importers as the obligated parties to ensure that biofuels cannot be locked out of the market. Unfortunately, some refiners have sought to rewrite key elements of the RFS to avoid their obligation under the law. One such attempt has been to shift the point of obligation and ultimately the responsibility of complying with the goals of the RFS. The attempt would have shifted from refiners and importers to downstream players such as fuel retailers. The change would have imposed 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.
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The ethanol industry is a powerful engine for economic growth in rural America — it brings good jobs to rural communities and gives fair prices to farmers. This downturn in demand puts that entire system under immense pressure.