EPA finalizes 2016 renewables target at 18.1 billion gallons

WASHINGTON - The U.S. Environmental Protection Agency wants energy companies to blend 18.1 billion gallons of biofuels into the nation's fuel supply next year, more than in a proposal laid out in May, it said in announcing final rules on renewabl...


WASHINGTON - The U.S. Environmental Protection Agency wants energy companies to blend 18.1 billion gallons of biofuels into the nation's fuel supply next year, more than in a proposal laid out in May, it said in announcing final rules on renewables use for 2014-16 on Monday.

The EPA's long-awaited Renewable Fuel Standard mandates put the ethanol requirements for next year at 14.5 billion gallons, representing an increase from the agency's May proposal and in line with figures reported by Reuters ahead of the announcement.

The long-awaited Renewable Fuel Standard mandates are likely to trigger criticism both from biofuels groups that think the levels fall short of Congressional targets and oil firms that argue they cannot blend more renewables into gasoline.

The EPA set the total volume for renewable fuels at 16.93 billion gallons for the current year and 16.28 billion gallons for 2014, compared with a May proposal earlier this year of 16.30 billion and 15.93 billion, respectively.

That put the target for ethanol use in 2016 at 14.5 billion gallons, at 14.05 billion gallons in 2015, and at 13.61 billion gallons in 2014. That was higher than in a May proposal and slightly above expectations for modest increases.Sen. Heidi Heitkamp, D-N.D., released a statement after the EPA's announcement. “After years of delays, the EPA has finally lived up to its obligation to set biofuels blend levels and give producers and biofuels workers the certainty they need to go to work,” Heitkamp said. “This rule still doesn’t give us the ambitious targets we need or that Congress intended, but at least there is some progress as – after I pressed EPA to set bolder targets – the agency increased its targets from those proposed in May. Unfortunately, these levels still fall far short of what Congress set out. They’re below what we need to guarantee the thriving biofuels industry that North Dakota famers and workers deserve, and that would support energy from a clean, reliable fuel. Biofuels are just one component of the all-of-the-above energy strategy we pursue in North Dakota. But if EPA doesn’t get serious about encouraging biofuels – as the law requires – the agency’s inaction and unambitious targets will hamper North Dakota job growth and reduce energy security.”


Shares in biofuels companies rose on Monday. Pacific Ethanol stock climbed 16 percent, Amyris Inc gained 6 percent and Green Plains rose 4.4 percent. Renewable fuel credits, known as RINs, gained after the announcement, according to market participants. RINs are used by oil companies as an alternative way to meet EPA targets if they do not blend enough biofuels into gasoline and diesel.

Shares of refiners, who could have to face increasing renewable fuels costs or higher prices for RINs, were mostly down, with Valero Energy Corp., Marathon Petroleum Corp. and Phillips 66 all losing around one percent.

The rule helps "provide for ambitious, achievable growth" in renewable fuels, the EPA said in the statement.

The finalized rule is expected to trigger a wave of lawsuits from oil companies, ethanol producers, and environmentalists that have lobbied heavily on both sides of the controversial policy.

The agency proposed putting a 2016 requirement of 3.61 billion gallons for advanced biofuels, with 1.9 billion for biomass-based diesel, or biodiesel, and 230 million gallons for cellulosic biofuel.

The agency also proposed setting 2017 use for biodiesel at 2.0 billion gallons.

The finalized RFS mandates had been long delayed. Congress laid out a plan in a 2007 law that outlines the amount of renewable fuels required through 2022, and the EPA is meant each year by the end of November to set the mandate for the next year.

EPA's earlier proposal drew ire from both sides and threats of legal action. Biofuels groups said it fell short of the law's requirements, while oil groups said it was impossible to blend greater amounts of renewables into fuels.

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