The “Clean Fuels Alliance America,” a national trade association representing the biodiesel, renewable diesel, and sustainable aviation fuel industries, is asking the US Environmental Protection Agency (EPA) to reconsider blending requirements under the Renewable Fuel Standard (RFS) for 2024 and 2025. According to CFAA, the agency set biomass-based diesel and overall advanced volumes significantly below actual production of the fuels, which has had the effect of discouraging production and undercutting the environmental and economic benefits intended under the program.
“As the agency set the RFS rule last year, Clean Fuels asked EPA to support achievable growth in biomass-based diesel of 500 million gallons a year. That request was very conservative, since the industry’s achieved growth of 4.6 billion gallons is significantly higher,” said Kurt Kovarik, vice president of federal affairs for CFAA. “We warned EPA that the ‘no growth’ rule they set would undercut investments, economic opportunities for our industry and environmental benefits. Unfortunately, we’re seeing those consequences now.”
In its petition, which is available HERE, CFAA highlights the negative impacts that will continue to materialize if EPA does not revise the 2024 and 2025 volumes. CFAA alleges that, due to the squeeze on available market space for advanced biofuels:
- 116 million gallons of annual biodiesel production capacity has idled and 12 million gallons has permanently closed.
- Approximately 1.4 billion gallons per year of planned renewable diesel capacity has been delayed. Nearly 350 million gallons of announced capacity has been reduced or canceled.
- Approximately 800 million gallons of planned SAF production has been delayed.
- Combined, biodiesel and renewable diesel production is running about -1.28 billion gallons below existing capacity. This difference equates to an opportunity cost of 40,768 jobs and almost $14 billion in economic activity.
- If the RVO was aligned with today’s production capacity, the United States could avoid an additional 11 million metric tons of CO2e relative to today’s actual production volumes.
CFAA says the clean fuels industry is ready to produce more, however, the nature of the RIN market, and the direct relationship it has to the volumes EPA sets, actually determines how much fuel is being produced. While EPA views the RFS as a floor – in reality, it acts as a ceiling. CFAA points out that soon after the finalization of the Set Rule, the value of RINs fell precipitously. RIN values continue to fall today and the situation is forcing domestic fuel production facilities to close. As of the end of June, RIN prices had fallen -45% in 2024, continuing a downward trajectory from 2023.
In light of the available data, CFAA is asking the EPA to use 2023 production as a baseline and allow additional growth in 2024 and 2025. The group’s proposed biomass-based diesel volume for 2024 is 5.1 billion gallons, which is +500 million gallons more than estimated 2023 production. CFAA would see the volume lifted to 5.6 billion gallons for 2025. EPA’s volume requirements are currently set at 3.04 billion gallons in 2024 and 3.35 billion in 2025. In addition, CFAA is urging the EPA to make “proportional increases” in the D5, aka “advanced biofuel,” as well as total volumes for 2024 and 2025.
It’s also worth noting that CFAA has notified the EPA of its intent to sue the agency for what it calls a “failure to issue timely 2026 Renewable Fuel Standards.” Under the law, EPA is required to finalize RFS volumes 14 months before the start of the compliance yea. The deadline for 2026 is the end of October this year. However, in late June, the White House Office of Management and Budget (OMB) set a timeline for EPA to propose the 2026 RFS volumes by March 2025 and finalize the rule by December 2025. “EPA’s failure to timely issue the 2026 RFS volumes compounds another issue: EPA set the volumes for 2023 through 2025 too low,” Clean Fuels states in the letter. Learn more HERE.
