Last year, the US approved the scaled introduction of mandated biofuels targets as covered in the Energy Policy Act of 2005.
The Act directed the EPA to issue regulations for the mandated biofuels target – or Renewable Fuels Standard (RFS) – by August 2006, with a default mandate of 2.78% use of biofuels for calendar 2006 if the regulations were not yet complete.
Given the need for the RFS regulations to balance stakeholder concerns on the feasibility, costs, emissions inventory impacts, and benefits of mandated biofuels targets, the EPA said it was unlikely to meet the August deadline.
The EPA also said the details of the domestic environmental credit trading scheme being developed for biofuels use in the US need to be finalised before the RFS could be fully implemented.
Therefore the EPA has advised biofuels and oil producers that the default mandate will take effect, resulting in the mandated use of 4 billion gallons (more than 15,140 megalitres) of biofuels – primarily ethanol and biodiesel – throughout 2006.
If the target is not met, the deficit will be added to the mandated target for 2007 (4.7 billion gallons).
The US Renewable Fuels Association (RFA) has welcomed the EPA guidance, saying it is likely that mandated targets will be met in 2006.
“Virtually all the stakeholders agree that the demand for high octane, clean-burning gasoline components will result in well more than 4 billion gallons of ethanol and biodiesel being used next year,” said RFA president Bob Dinneen.
Additionally, the decision to measure biofuels use as an aggregate in 2006 rather than a refinery-by-refinery basis reduces the need for internal and external auditing and associated costs.
Dinneen said the interim guidance would give refineries the flexibility they needed to implement changes throughout the year as they adjusted to the requirements of the RFS.
“At the same time, this rule preserves the certainty of market demand that is critical to the continued investment in domestically produced renewable fuels such as ethanol and biodiesel,” Dinneen said.
