In the July 1, 2011, Federal Register, the EPA proposed a projected cellulosic biofuel volume for 2012 and annual standards for cellulosic biofuel, biomass-based diesel, advanced biofuel, and renewable fuels that would apply to all gasoline and diesel produced or imported in year 2012. In addition, the action proposed an applicable volume of biomass-based diesel that would apply in 2013.

Several weeks ago the EPA announced its proposed 2012 percentage standards for four fuel categories that are part of the agency's Renewable Fuel Standard program (RFS2). Those standards have now been published in the Federal Register.

The proposed 2012 overall volumes and standards are:

• Biomass-based diesel (1.0 billion gallons; 0.91 percent)
• Advanced biofuels (2.0 billion gallons; 1.21 percent)
• Cellulosic biofuels (3.45 - 12.9 million gallons; 0.002 – 0.010 percent)
• Total renewable fuels (15.2 billion gallons; 9.21 percent)

Under the Clean Air Act Section 211(o), the EPA is required to set the renewable fuel standards each November for the following year. In general the standards are designed to ensure that the applicable volumes of renewable fuel specified in the statute are used. However, the statue specifies that the EPA is to project the volume of cellulosic biofuel production for the upcoming year and must base the cellulosic biofuel standard on that projected volume if it is less than the applicable volume set forth in the Act.

In the July 1, 2011, Federal Register, the EPA proposed a projected cellulosic biofuel volume for 2012 and annual standards for cellulosic biofuel, biomass-based diesel, advanced biofuel, and renewable fuels that would apply to all gasoline and diesel produced or imported in year 2012. In addition, the action proposed an applicable volume of biomass-based diesel that would apply in 2013.

The action also presented a number of proposed changes to the RFS2 regulations that are designed to clarify existing provisions and to address several unique circumstances that have come to light since the RFS2 program became effective on July 1, 2010. The proposal also made a minor amendment to the gasoline benzene regulations regarding inclusion of transferred blendstocks in a refinery's early benzene credit generation calculations.

The Energy Independence and Security Act of 2007 (EISA) established the annual renewable fuel volume targets, which steadily increase to an overall level of 36 billion gallons in 2022. To achieve these volumes, the EPA calculates a percentage-based standard for the following year. Based on the standard, each refiner, importer, and non-oxygenate blender of gasoline or diesel determines the minimum volume of renewable fuel that it must ensure is used in its transportation fuel.

Based on analysis of market availability, EPA is proposing a 2012 cellulosic volume that is lower than the EISA target for 2012 of 500 million gallons. The agency said it will continue to evaluate the market as it works to finalize the cellulosic standard in the coming months. The agency remains optimistic that the commercial availability of cellulosic biofuel will continue to grow in the years ahead.

In addition, the agency proposed a volume requirement of 1.28 billion gallons for biomass-based diesel for 2013. EISA specifies a one billion gallon minimum volume requirement for that category for 2013 and beyond, but enables EPA to increase the volume requirement after consideration of a variety of environmental, market, and energy-related factors

The agency will hold a public hearing on July 12, 2011 in the Washington, DC area. Details of the time and location of the hearing be announced in a separate notice. Comments are due on or before Aug. 11, 2011.

More information on the standards and regulations.

SOURCE: Federal Register