US biodiesel association the National Biodiesel Board (NBB) has submitted comments asking the US Environmental Protection Agency (EPA) to properly account for small refinery exemptions.
In comments submitted to the agency’s Supplemental Notice of Proposed Rulemaking for the 2020 Renewable Fuel Standards, the NBB urged the EPA “to properly account for small refinery exemptions, address the remand of the 2016 standards, and increase the 2021 biomass-based diesel volume.”
The association welcomed the EPA’s proposal to estimate 2020 and future small refinery exemptions in the formula for setting Renewable Volume Obligations (RVOs). In its comments, the NBB called it a positive and necessary step to ensure that future small refinery exemptions do not continue to destroy demand for biomass-based diesel.
However, according to the NBB, the EPA’s proposal falls short in a number of ways.
"On October 4, President Trump, the EPA and USDA jointly pledged to account for small refinery exemptions in the RFS annual rule and ensure that the biomass-based diesel volume is met,” said Kurt Kovarik, vice-president for federal affairs at the NBB. “On October 15, however, EPA proposed action that would significantly underestimate future exemptions and fall short of ensuring that RVOs are met."
The NBB encouraged the agency to use the best possible estimate of future small refinery exemptions, specifically a three-year average of the gallons that the EPA actually exempted.
"Unfortunately, the proposal uses an average of past exemptions recommended by the Department of Energy (DOE) rather than an average of actual volumes waived," the NBB wrote. "Because EPA has ignored DOE's recommendations in each of the past three years, that methodology would only account for about half of the annual impact of recent small refinery exemptions."
The biodiesel association also noted that the EPA has not proposed to address small refinery exemptions made before 2020. It added: “Over 4 billion gallons of demand for biofuels has been lost due to retroactive small refinery exemptions for compliance years 2015 through 2018. This impact has been particularly significant for biomass-based diesel producers because biomass-based diesel RINs can be used to satisfy multiple obligations under the RFS. Despite having the means to do so, EPA has not proposed to do anything in the Supplemental Notice to address this massive loss of renewable fuel demand."
The NBB has reiterated its request that the EPA raise the 2021 biomass-based diesel volumes and the 2020 RVOs to include the 500 million gallons that the D.C. Circuit Court recognised (in ACE vs. EPA) were improperly waived in 2016.
"Increasing the RVO by 500 million gallons would not only be achievable by BBD [biomass-based diesel] and other renewable fuels, it would assist in reviving production, reopening production facilities, and saving jobs," the comments continued. "The BBD industry can still achieve higher volumes if EPA properly accounts for small refinery exemptions and increases the renewable volume obligations and account for the ACE [American Coalition of Ethanol] gallons."
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