EPA Enforcement of RFS2 Heats Up
The Environmental Protection Agency (EPA) is exercising its authority and enforcing the requirements of the Clean Air Act’s renewable fuel standard (RFS) program. The EPA issued twenty-four notices of violation on November 7, 2011, to petroleum refiners, importers and exporters of renewable fuel.
Following a filing last month of criminal charges of wire fraud, money laundering, and violations of the Clean Air Act (CAA) against an individual, Rodney R. Hailey, the EPA issued civil notices of violations (NOVs) to the entities that relied upon the allegedly invalid Renewable Identification Numbers (RINs) generated by Mr. Hailey. The companies involved are obligated parties under the RFS program and thereby, subject to Renewable Volume Obligations (RVOs) designed to demonstrate compliance with the renewable fuel standards set by Congress -- 36 billion gallons by 2022.
Stoel Rives issued a legal update on these matters, among the first enforcement actions initiated by the EPA under the RFS2 requirements. The entire update can be read here.
Renewable Energy Law Alert: EPA Releases Draft 2012 Renewable Fuel Standards
The U.S. Environmental Protection Agency (“EPA”) has released a series of proposed rules relating to the Renewable Fuel Standard (“RFS”). Originally enacted by Congress in the Energy Policy Act of 2005 and expanded by the Energy Independence Act of 2007, the RFS represents the country’s most comprehensive and effective policy in the energy security and greenhouse gas (“GHG”) sectors. The current RFS, often referred to as RFS2, contains four categories of fuel made from renewable biomass. EPA has the authority to set the mandate levels for these renewable fuels. U.S. petroleum refiners and importers are obligated parties under the program and must prove compliance by purchasing a sufficient quantity of these fuels. The EPA proposed an overall standard for 2012 for renewable fuel of 9.21% or 15.2 billion gallons of fuel and also proposed significant regulatory changes to the program.
Click here to continue reading this alert.
If you have any questions about the content of this alert, please contact:
Graham Noyes |
Marty Banks |
Kevin Prohaska |
Sara Bergan |
Biofuels Law Alert: EPA Releases Final Renewable Fuel Standards for 2011
EPA has completed the roll out of the complex RFS2 program by setting renewable fuel quantity requirements for 2011. EPA severely curtailed the cellulosic biofuels standard from 250 million gallons to six million gallons based on limited industry growth. Looking forward to 2012, however, the agency identified a potential surge to 300 million gallons of production. EPA held firm on both the overall renewable fuel standard at 14 billion gallons and advanced biofuels at 1.35 billion gallons despite the cellulosic cut. Other contentious RFS2 issues including retroactive Renewable Identification Numbers (“RINs”) and foreign feedstock were also resolved.
For the full alert, please click here.
If you have additional questions regarding RFS2, please contact Graham Noyes at (206) 386-7615 or jgnoyes@stoel.com.
EPA Issues Proposed RFS2 Rules for 2011
The EPA has issued proposed RFS2 rules for 2011 that provide some indications that the agency is dedicated to jump starting the advanced biofuels industry. Most notably, the EPA held fast to an overall mandate of 13.95 billion gallons of renewable fuel. While the agency intends to deviate downward on cellululosic biofuels with a cut of 90% or more anticipated, the proposed rule maintains the overall Advanced biofuel mandate at 1.35 billion gallons and the Biomass-based diesel requirement at 800 million gallons. Thus the agency is paying significant attention to the existing capacity of the biodiesel industry despite the lack of approval for the blender's credit six months into the year. Biofuel supporters hope that this policy gap will be addressed shortly or that RIN values will continue to increase for Biomass based diesel.
The proposed rule contains two other notable components: tentative but retroactive RIN credit for canola, sorghum, pulpwood and palm oil biofuel producers; and a petition process for foreign countries to avoid the onerous feedstock obligations that now apply in favor of the aggregate approach available within the US. The referenced feedstocks have been under consideration by EPA for Life Cycle Analysis since prior to the original RFS2 Final Rule was released but the work has still not been completed. The severe challenge for this group of biofuel producers is that EPA has previously indicated that RIN generation would trigger only when the pathway was certified. EPA's proposed new flexibility is an improvement but still falls short of providing full RIN value for these producers due to the lag time and uncertainty associated with the approach. The proposed petition process for foreign countries is an apparent attempt to level the playing field for foreign producers who now must trace and certify feedstocks such as soy and corn in a manner not required within the US.
The rules will be published in the Federal Register shortly and the public comment period will likely run to approximately August 13th.
Free Webinar on New Advanced Renewable Fuel Standard/RFS2
A quick follow up on my post last month regarding my colleague Graham Noyes’ white paper on the EPA’s sweeping revision of the federal Advanced Renewable Fuel Standard (RFS2). On April 20, Graham and his co-author Clayton McMartin will participate in a live Q&A webinar with Biofuels Journal publisher Myke Feinman on the new RFS2. Topics will include:
• The Four Categories of Fuel under RFS2
• Why All Producers Must Register Their Facilities
• What RINs will be Reinstated, Why, How, and When
• Lifecycle Analysis (GHG) and the Impact on Biofuel Markets
• Integration of RFS1 and RFS2
• Sweeping Changes in the RIN Program with RFS2
• Violations and Penalties
• The Seven Types of RINs
• The "Nesting" of Standards and the Potential Impact on Business
• EPA's New Role with the Moderated Transaction System (EMTS)
Registration and participation in the webinar is FREE. Click here to register for the advanced renewable fuel standard (RFS2) webinar with Biofuels Journal.
White Paper Explains New Advanced Renewable Fuel Standard/RFS2
My colleague Graham Noyes and Clayton McMartin of Clean Fuels Clearinghouse recently published a white paper on the massive and staggeringly complex revision of the federal Advanced Fuel Standard (RFS) issued by the U.S. Environmental Protection Agency on February 3, 2010. Graham and Clayton describe how this second generation renewable fuel initiative (RFS2) will bring industry and government together in ways never before experienced by the fuels industry.
With a view to helping market participants develop comprehensive cost/benefit and compliance strategies, Graham and Clayton structure their discussion according to the following key topics:
- Legal background and new statutory requirements of RFS2;
- Compliance implications of updates to the Renewable Identification Numbers (“RINS”) process; and
- Issues important to particular market participants, including producer obligations, new fuel pathways, importer issues and RIN trading economics.
Download a free copy of the Renewable Fuel Standard/RFS2 White Paper (PDF)
