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EPA rules permits one-year ethanol blending slowdown without formal waiver

July 17, 2008

EPA reportAccording to Clean Fuels Clearinghouse, the EPA can be expected to answer requests for a Renewable Fuel Standard waiver with “this issue was anticipated in the original Act and is to be addressed with the use of RINs.”

RINs are renewable fuel credits, and a rule posted by the EPA in May 2007 allows users to carryover either a surplus or a deficit of RINs for one calendar year. The carryover mechanism is intended to address situations, such as the midwestern floods, where unforeseen circumstances create difficult conditions in the commodity and fuel markets.

According to the EPA comment in the May 1 , 2007 Federal Register: ” The Act clearly set up a credit program with a credit life, meaning Congress intended parties to use credits in some cases instead of blending renewable fuel. The Act is best read to harmonize all of its provisions. In addition, we note that other provisions of the Act may lead to less renewable fuel use in a given year than the statutorily-prescribed volumes, but Congress adopted them and intended that they could be used. For instance, the deficit carryover provision allows any obligated party to fail to meet its RVO in one year if it meets the deficit and its RVO in the next year. If several obligated parties took advantage of this provision, it could result in the nationwide total volume obligation for a particular calendar year not being met.”

Clean Fuels Clearinghouse reported that no major fuel blender exercised its right to carryover a deficit in 2007, meaning that they are clear to establish a deficit for 2008, or 2009, as they see fit, by reducing their blending activity. The Governors of Texas and Connecticut requested a temporary 50 percent reduction in the RFS to address high grain prices.

Complete Biofuels Digest background reporting on recent biofuels news from EPA is here.

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    Written by Jim Lane · Filed Under Top Story 

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