Tuesday, Clean Fuels Alliance America and its members testified at the Environmental Protection Agency's "Public Hearing for RFS Standards for 2023–2025 and Other Changes," held via teleconference. Clean Fuels staff expressed frustration with the proposed volumes for biomass-based diesel because they do not match the volumes that are already in the market and do not account for expected growth in capacity and feedstocks.
"The proposed rule significantly undercounts existing biomass-based diesel production and fails to provide growth for investments the industry has already made in additional capacity, including for sustainable aviation fuel," Clean Fuels CEO Donnell Rehagen stated in testimony to EPA.
According to data from EPA's Moderated Transaction System, the U.S. market exceeded 3 billion gallons of biomass-based diesel in 2021 and 2022. The Energy Information Administration's Short Term Energy Outlook, which until this proposal has informed EPA's decisions on annual RFS volumes, projects a 500-million-gallon increase in biodiesel and renewable diesel consumption for 2023. But EPA's proposed volumes for the biomass-based diesel category limit growth in the category to 65 million gallons per year through 2025 and do not reach 3 billion gallons even in the final year.
Clean Fuels Vice President of Federal Affairs Kurt Kovarik stated at the hearing, "Clean Fuels is once again frustrated that EPA has the wherewithal needed to determine current production, the knowledge of the investments being made, and the resources to accurately determine feedstock availability -- yet proposes a no growth scenario." Clean Fuels members highlighted investments that have been made to increase biodiesel and renewable diesel production and distribution capacity, pointing to the successful USDA Higher Blends Infrastructure Incentive Program as one source of investment.
Clean Fuels members also highlighted the availability of additional supplies of feedstocks such as soybean oil and canola that will result from more than $4.75 billion in new investments in processing capacity.
Rehagen added, "In addition to growing volumes above and beyond the proposed rule, the clean fuels industry is meeting and exceeding all of the statutory factors that EPA is supposed to consider when setting BBD volumes. Increasing production of clean fuels through the RFS improves U.S. energy security, lowers diesel fuel prices, and generates carbon and emission reductions today that are necessary to meet future national environmental goals. Additionally, our members are generating new jobs and increasing economic opportunities for growers, fuel producers and other economic sectors."
Kovarik concluded his testimony by stating, "In finalizing the overdue rules for 2021 and 2022, Administrator Regan committed to increase availability of homegrown fuels, put the RFS program back on track, and deliver certainty and stability. Today, however, EPA is failing to follow through. Where the 2022 volumes were supposed to be a jumping off point for growth in advanced biofuels, the proposed 2023 volumes return to the same flat line we experienced in prior years."
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