By Stephanie Kelly

NEW YORK (Reuters] – The U.S. Biofuel Blending Program (RFS), which is also known as the Renewable Fuel Standard, could have its most transformational year in 2022. This will be because the Biden Administration has to decide whether or not to change statutes that mandating U.S. Renewable Fuel Blending.

It was created to make certain quantities of renewable fuels mandatory to replace and reduce the use of petroleum-based oil fuels. While oil refiners are obliged to incorporate billions upon billions of gallons biofuels into their gasoline mix, they feel the program is too expensive and should be reduced, biofuel producers and corn farmers like the standards because it has helped them to create a multi-billion dollar market for their products.

What is the RFS?

The RFS was established by Congress in 2005. It was expanded in 2007 and reauthorized in 2008. It is managed by the Environmental Protection Agency, (EPA).

Congress established annual volume requirements for renewable fuels at the start of the program. They will continue to be met through 2022. Current volume requirements for 2022 are approximately 21 billion gallons.

Tradeable credit, also known as RINs or tradeable credits can be purchased by refiners who do not blend biofuels from other companies that follow the mandates.

Some small refineries have been exempted by the regulations in prior years due to financial hardship. These exemptions are called Small Refinery Exemptions.

WAIT FOR 2022!

In coordination with both the Department of Energy, and the Department of Agriculture this year, the EPA must decide which phase of the program to continue.

The EPA intends to present requirements starting in 2023 in May, and ending in December.

WHAT DO STAKEHOLDERS WANT FROM THE NEW REQUIREMENTS?

Scott Irwin of the University of Illinois is a professor of agricultural and consumer economists. He stated that biofuel producers and corn farmers want the EPA’s blending volume requirements for renewable fuels to be increased.

However, merchant refiners feel that the program is too expensive and will threaten their business and jobs at smaller refineries.

Irwin explained that “the refining side would like to give a permanent haircut the RFS so basically growth in biofuels will have to be market driven rather than driven by mandates.”

WHAT IS THE PLANS OF BIDEN ADMINISTRATION

Although it is too early to predict how the administration will proceed with finalizing their proposals, There are many factors that may be involved.

The U.S. government is concerned about limiting oil production and petroleum-based fuel supply.

The White House however has established aggressive goals to decrease carbon dioxide emissions and combat climate change. Incentivizing renewable fuel production, the RFS might be a crucial tool in the fight against climate change. The White House must balance the needs of farmers, workers, and consumers.

ISN’T THERE ANYTHING MORE ELSE THAN MANDATES?

Uncertainty surrounds the RFS Program’s scope in 2023, and beyond.

After the White House instructed the agency to investigate how renewable fuels could be used to charge electric vehicles, a top official from the EPA told Reuters that the agency is now considering making the power generation of electric cars eligible for renewable fuel credit.

This move will boost U.S.-based electric vehicle manufacturing, which accounts for only 2% of U.S. vehicles.

The program’s future integration of Small Refinery Exemptions is also uncertain. Although the EPA rejected 65 pending exemptions applications, the decision isn’t final.

It has been speculated that this program would be less focused on corn-basedethanol. This is the largest biofuel used and the key lobbying power in the sector. Instead, it will focus more on advanced biofuels, such as renewable diesel. These biofuels are made of plant oils and animal fats.

Irwin indicated that there was no question about the future direction of advanced biofuels. It will be fascinating to see how advanced biofuels are handled in the new reset.