Renwable Fuels Standard (RFS) in 2011

Posted on: July 12, 2010 in Energy, EPA, Ethanol, Renewable Fuel Standard, U.S Dept. of Energy, USDA

For the first time ever under the RFS, EPA today put out for review its estimates for RFS targets in 2011. Under the law, these are not required until November. EPA's estimate for 2011 are:

• Biomass-based diesel (0.80 billion gallons; 0.68 percent)

• Advanced biofuels (1.35 billion gallons; 0.77 percent)

• Cellulosic biofuels (5 - 17.1 million gallons; 0.004 - 0.015 percent)

• Total renewable fuels (13.95 billion gallons; 7.95 percent)

Of note, EPA has revised down cellulosic ethanol use from original RFS targets for the second year in a row. While this may be prudent for EPA based on market conditions, it does send a chilling effect through the investment community with respect to cellulosic ethanol technologies. EPA's estimates under score the need for Dept. of Energy and USDA to construct loan guarantee programs that work for cellulosic ethanol companies. As the RFA has repeatedly pointed out here and here, current and proposed loan guarantee programs have flaws that prevent cellulosic ethanol producers to take full advantage of these important programs. As such, a lack of avaialble investment has slowed the deployment of these technologies at a time when they are becoming most necessary.

Additionally, as volumes increase, EPA must move to increase the amount of ethanol the nation is permitted to use. Administrator Jackson should approve for use E15 in all vehicles, eliminating unnecessary confusion and truly opening the market for ethanol so the RFS can be successful. Other tactics, such as investment in ethanol infrastructure and the mandate sale of flexible fuel vehicles capable of using higher ethanol blends would be helpful.

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