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EPA proposes final RFS implementation rule

Agriculture.com Staff 09/11/2006 @ 1:55pm

The U.S. Environmental Protection Agency (EPA) late last week released a proposed rule to fully implement the Renewable Fuels Standard created as part of the Energy Policy Act of 2005 (EPAct) signed in August 2005.

The RFS requires oil refiners to use 4 billion gallons of renewable fuels in motor fuel in 2006. The required annual usage increases incrementally until 2012, when oil refiners will be required to use 7.5 billion gallons of renewable fuel. While ethanol will constitute the vast majority of renewable fuel used, other fuels like biodiesel will also qualify under the program.

Additionally, oil refiners will be allowed to accrue credits for blending more ethanol than required that can then be traded or sold to other refiners who have chosen not to blend the required amounts for whatever reason. This provision was critical to securing the final compromise that led to the passage of the RFS.

"EPA has worked diligently with all stakeholders, including the RFA, to create a credit trading mechanism that provides oil refiners the flexibility they need while honoring congressional intent to expand the use of renewable fuels," said Renewable Fuels Association president Bob Dinneen.

While this proposed rule would create the credit trading program and fully implement the RFS, the default program has been in place since Jan. 1, 2006. Under the default rule, oil refiners are required to use at least 4 billion gallons of renewable fuel. According to industry projections, the U.S. will consume some 5 billion gallons of ethanol in 2006, well above RFS requirements.

Currently, 101 ethanol biorefineries nationwide have a capacity to produce more than 4.8 billion gallons annually. Additionally, 44 biorefineries are under construction and 7 are expanding that will add more than 3 billion gallons of capacity when complete.

The U.S. Environmental Protection Agency (EPA) late last week released a proposed rule to fully implement the Renewable Fuels Standard created as part of the Energy Policy Act of 2005 (EPAct) signed in August 2005.

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