Regan discusses RFS RVOs, E15 waiver during Senate hearing

Sen. Pete Ricketts, R-Neb., pressed U.S. EPA Administrator Michael Regan on the agency’s proposed Renewable Fuel Standard biomass-based diesel renewable volume obligations (RVOs) and its delayed action on a Midwest E15 petition during a March 22 hearing held by the U.S. Senate Committee on Environment and Public Works to consider the EPA’s proposed fiscal year (FY) 2024 budget request.

The EPA released its long-awaited RFS “set” rule in December 2022. The proposed rule includes RVOs for 2023, 2024 and 2025. Those in the biofuels industry have been generally supportive of the agency’s proposed RVOs for cellulosic biofuel, advanced biofuel and renewable fuel, but have criticized the low proposed RVOs for biomass-based diesel.

In the rulemaking, the EPA has proposed to set the proposed biomass-based diesel RVOs for 2023, 2024 and 2025 at 2.82 billion gallons, 2.89 billion gallons and 2.95 billion gallons respectively. During the hearing, Ricketts pointed out that those proposed RVOs are well below existing production capacity levels, which he estimated at 3.1 billion gallons. In fact, the EIA’s latest Monthly Biofuels and Feedstocks Update indicates total U.S. capacity for biodiesel, renewable diesel and associated fuels was at 4.922 billion gallons in December 2022, including 2.09 billion gallons of biodiesel capacity and 2.854 billion gallons of capacity for renewable diesel and associated fuels, including renewable heating oil, renewable jet fuel, renewable naphtha, renewable gasoline and other biofuels and biointermediates. The EPA’s own renewable identification number (RIN) data indicates approximately 5.79 billion D4 biomass-based diesel RINS were generated under the RFS in 2022, up from 4.87 billion in 2021. More than 4.78 billion of the 5.79 billion D4 RINs generated last year were generated for domestically produced biodiesel, renewable diesel, renewable jet fuel and renewable heating oil. A significant volume of additional renewable diesel and sustainable aviation fuel (SAF) capacity is under development and expected to become operable over the next several years.

During the hearing, Ricketts asked Regan why the agency has proposed RVOs for biomass-based diesel at levels below current production capacity. “I think that when we look at the lack of progress that had been made in the previous years, we had to go back and do the homework of a previous administration and catch up for 2020, 2021 and 2022,” Regan said. With the “set” rule, Regan said the agency is trying to set volumes for multiple years so that it can create some certainty, as requested by the biofuels industry. “So, I think the industry was pretty satisfied with where we landed on 2021 and now they are looking for that same trajectory and certainty in those out years.” Regarding the proposed biomass-based diesel RVOs for 2023 and beyond, Regan told Ricketts he will look into the issue to answer his question accurately.

Ricketts also discussed the importance of biomass-based diesel fuels in affordably reducing emissions in heavy duty trucking. He said that the approximate price for a diesel-fueled tractor is $180,000—significantly less than the approximately $500,000 price tag for an equivalent electric-powered tractor. Electric vehicles also weight more, limiting the load they can carry, he said.

Regarding E15, Ricketts noted that he was among the group of Midwest governors that petitioned the EPA in April 2022 for a regulatory change that would allow E15 to be sold year-round within their states. Under the Clean Air Act, the EPA was to respond to that petition within 90-days, but missed that deadline. The agency in March 2023 released a proposed rule to implement the requested change in Illinois, Iowa, Minnesota, Missouri, Nebraska, Ohio, South Dakota and Wisconsin, but delayed the effective date of the proposed rule to 2024.

Ricketts asked Regan to explain the EPA’s delay in responding to the petition and asked what the agency’s plans are for allowing year-round sales of E15 during the upcoming summer driving season.

“I understand why this is important and I know it was important to you before you took this position [as senator],” Regan said. “We are excited about moving towards the waiver for 2024. We know the timing is different than what was originally requested and I believe our folks were being responsive to fuel distribution companies so that could be prepared for the next year—not this year. So, I recognize that we are on a slightly different clock.”

Regan said he will look into the issue and get Ricketts a more specific answer regarding the EPA’s failure to meet the 90-day deadline. For the 2023 summer driving season, “we’ll have to do is what we did last year, which is assess it case by case as we get closer to that time,” he said. In April 2022 the Biden Administration reinstated the ability to sell E15 during the summer driving season via a nationwide emergency waiver that was implemented as part of the administration’s effort to combat high fuel prices caused by Russia’s invasion of Ukraine. Representatives of the ethanol industry and a variety of federal lawmakers are urging the agency to take similar action this year.

A full replay of the hearing is available on the Senate Committee on Environment and Public Works website.