Renewable Fuel Standard Rfs

Federal policy has played a key role in the emergence of the U.S. biofuels industry. Policy measures include minimum renewable fuel usage requirements, blending and production tax credits, an import tariff, loans, and research grants. This report focuses on the mandated minimum usage requirements, the RFS, whereby a minimum volume of biofuels is to be used in the national transport. fuel supply each year. It describes the general nature of the RFS mandate and its implementation, and outlines some emerging issues related to the sustainability of the continued growth in U.S. biofuels production needed to fulfill the expanding RFS mandate, as well as the emergence of potential unintended consequences of this rapid expansion. A print on demand report.

In the United States, we have come to depend on plentiful and inexpensive energy to support our economy and lifestyles. In recent years, many questions have been raised regarding the sustainability of our current pattern of high consumption of nonrenewable energy and its environmental consequences. Further, because the United States imports about 55 percent of the nation's consumption of crude oil, there are additional concerns about the security of supply. Hence, efforts are being made to find alternatives to our current pathway, including greater energy efficiency and use of energy sources that could lower greenhouse gas (GHG) emissions such as nuclear and renewable sources, including solar, wind, geothermal, and biofuels. The United States has a long history with biofuels and the nation is on a course charted to achieve a substantial increase in biofuels. Renewable Fuel Standard evaluates the economic and environmental consequences of increasing biofuels production as a result of Renewable Fuels Standard, as amended by EISA (RFS2). The report describes biofuels produced in 2010 and those projected to be produced and consumed by 2022, reviews model projections and other estimates of the relative impact on the prices of land, and discusses the potential environmental harm and benefits of biofuels production and the barriers to achieving the RFS2 consumption mandate. Policy makers, investors, leaders in the transportation sector, and others with concerns for the environment, economy, and energy security can rely on the recommendations provided in this report.

The Renewable Fuel Standard (RFS) establishes minimum volumes of various types of renewable fuels that must be included in the U.S.'s supply of fuel for transportation. Those volumes -- as defined by the Energy Independence and Security Act of 2007 (EISA) -- are intended to grow each year through 2022. Recently, the requirements of the RFS have been met largely by blending gasoline with ethanol made from cornstarch. In the future, EISA requires the use of increasingly large amounts of "advanced biofuels," which include diesel made from biomass (such as soybean oil or animal fat), ethanol made from sugarcane, and cellulosic biofuels (made from converting the cellulose in plant materials into fuel). A main goal of the Renewable Fuel Standard is to reduce U.S. emissions of greenhouse gases, which contribute to climate change. Policymakers and analysts have raised concerns about the RFS, particularly about the feasibility of complying with the standard, whether it will increase prices for food and transportation fuels, and whether it will lead to the intended reductions in greenhouse gas emissions. This analysis evaluates how much the supply of various types of renewable fuels would have to increase over the next several years to comply with the RFS. It also examines how food prices, fuel prices, and emissions would vary in an illustrative year, 2017, under three scenarios for the Renewable Fuel Standard. Figures and tables. This is a print on demand report.

This report focuses specifically on the Renewable Fuel Standard (RFS). It describes the general nature of the biofuels RFS and its implementation, and outlines some of the emerging issues related to the sustainability of the continued growth in U.S. biofuels production needed to fulfill the expanding RFS mandate, as well as the emergence of potential unintended consequences of this rapid expansion. This report does not address the broader public policy issue of how best to support U.S. energy policy.

The Renewable Fuel Standard (RFS) was established under the Energy Policy Act of 2005 (EPAct05, P.L. 109-58), and was later expanded under the Energy Independence and Security Act of 2007 (EISA; P.L. 110-140), in accordance with efforts at that time to reduce dependence on foreign oil, promote biofuel use, and stabilize transportation fuel prices, among other goals. Over 15 years, the RFS requires that increasing amounts of biofuels-36 billion gallons by 2022-be used in transportation fuel. The mandate is to be accomplished in part with advanced biofuels, including cellulosic biofuels-fuels produced from cellulosic materials including grasses, trees, and agricultural and municipal wastes-which would increase over time to comprise some 44% of the RFS in 2022. The U.S. Environmental Protection Agency (EPA) is required to set the annual standard (i.e., usage requirement) for cellulosic biofuels under the RFS if the projected volume of cellulosic biofuel production is less than the volume specified in the statute (i.e., the mandate). Under this circumstance, EPA can lower the annual cellulosic biofuels standard to the volume expected to be available for that year. If EPA lowers the standard for a given year, it is required to do so by November 30 of the preceding year. EPA concluded that the nation lacked sufficient production capacity to meet the RFS cellulosic biofuels mandate each year from 2010 to 2014. In 2010, EPA reduced the mandate from the statutory volume of 100 million gallons to 6.5 million ethanol-equivalent gallons, in 2011 from 250 million gallons to 6.0 million ethanol-equivalent gallons, in 2012 from 500 million gallons to 10.45 million ethanol-equivalent gallons, and in 2013 from 1 billion gallons to 810,185 ethanol-equivalent gallons. EPA proposes to lower the 2014 mandate from 1.75 billion gallons to 17 million ethanol-equivalent gallons, and to rescind the 2011 cellulosic biofuel standard. The 2010-2012 reduced mandates were not met by actual cellulosic biofuel production, which EPA reports was limited. Instead, these mandates were largely met with waiver credits. EPA announced in November 2014 that the 2013 compliance deadline will take place in 2015, and that it intends to finalize the 2014 standard in 2015. This delay-which is a year past the statutory deadline-raises significant uncertainty for biofuel producers, feedstock growers, and refiners. For years, actual cellulosic biofuel production has significantly fallen short of the RFS mandates. However, there were noteworthy occurrences in 2014 for the industry, including the opening of three commercial-scale cellulosic ethanol plants in Iowa and Kansas with a combined production capacity of up to 52 million gallons per year. There was also the November 2014 bankruptcy filing by the company KiOR, which commenced operations of the first commercial-scale cellulosic fuel facility in 2012 in Mississippi.