U.S. Department of Energy - Energy Efficiency and Renewable Energy
Federal Energy Management Program
EPA Establishes Rules for the National Renewable Fuel Standard
April 18, 2007
The U.S. Environmental Protection Agency (EPA) established the
nation's first comprehensive Renewable Fuel Standard (RFS) program
on April 10th. The RFS was mandated by the Energy Policy Act of 2005, and
requires that by 2012, the equivalent of at least 7.5 billion gallons
of renewable fuel be blended into motor vehicle fuel sold in the
United States. The RFS program is based on a credit trading system
that provides a flexible means for industry to comply with the annual
standard by allowing renewable fuels to be used where they are most
economical, and it also allows the use of various renewable fuels to
meet the minimum requirements. By 2012, the program is estimated to
cut petroleum use by up to 3.9 billion gallons and cut annual
greenhouse gas emissions by up to 13.1 million metric tons, the
equivalent of removing 2.3 million cars from the road.
The RFS program requires major refiners, blenders, and importers in
the contiguous United States to use a minimum volume of renewable fuel
each year between 2007 and 2012. The minimum level is determined as a
percentage of the total volume of fuel a company produces or imports
and will increase every year. For 2007, 4.02 percent of all the fuel
sold or dispensed to U.S. motorists will have to come from renewable
sources, equal to roughly 4.7 billion gallons of renewable fuels. That
amount was already exceeded in 2006, when the ethanol fuel industry
produced 4.86 billion gallons of ethanol, and new and expanded plants
now under construction are expected to push the annual production of
ethanol well above the RFS requirement. However, the RFS program will
guarantee a minimum market for renewable fuels in the event of an
industry downturn, and it was welcomed by the Renewable Fuels
Association (RFA). See the DOE press release, the EPA rules, and the RFA press releases on the RFS and on the industry's ethanol production in 2006.
The EPA gave the ethanol fuel industry an additional boost last week,
when it set emissions rules for the ethanol fuel plants equal to those
for facilities producing ethanol for consumption. The final rule also
will no longer require facilities that use carbohydrate feedstocks in
producing ethanol to count fugitive emissions of regulated pollutants
when determining if they meet or exceed their emissions limits.
Fugitive emissions are emissions that do not come from process stacks
or vents. This change may allow some plants to expand production. The
rule will also allow new ethanol facilities to emit up to 250 tons of
regulated pollutants per year in areas that are not known to be
exceeding EPA's air quality standards and that are not in an Ozone
Transport Region, a region where ground-level ozone is a pervasive
problem. See the EPA press release, the EPA summary
of the changes, and the full 118-page final rule (PDF 221 KB). Download Adobe Reader.
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