Regulation of Fuels and Fuel Additives: Renewable Fuel Standard ...

Stdi = The RFS program standard for year i, in percent
GVi = The non-renewable gasoline volume produced by an obligated party in year i, in
gallons
Di-1
= Renewable fuel deficit carryover from the previous year, in gallons
The Energy Act only permits a deficit carryover from one year to the next if the
obligated party achieves full compliance with its RVO including the deficit carryover in the
second year. Thus deficit carryovers could not occur two years in succession. They could,
however, occur as frequently as every other year for a given obligated party.
The calculation of an obligated party's RVO is necessarily retrospective, since the
total gasoline volume that it produces in a calendar year will not be known until the year has
ended. However, the obligated party will have an incentive to project gasoline volumes, and
thus the RVO, throughout the year so that it can spread its efforts to comply across the entire
year. Most refiners and importers will be able to project their annual gasoline production
volumes with a minimum of uncertainty based on their historical operations, capacity, plans
for facility downtimes, knowledge of gasoline markets, etc. Even if unforeseen
circumstances (e.g., hurricane, unit failure, etc) significantly reduced the production volumes
in comparison to their projections, their RVO would likewise be reduced proportionally and
their ability to comply with the RFS requirements would be only minimally affected. Each
obligated party's projected RVO for a given year becomes more accurate as that year
progresses, but the obligated party should nevertheless have a sufficiently accurate estimate
of its RVO at the beginning of the year to allow it to begin its efforts to comply.
B. What Counts As A Renewable Fuel In The RFS Program?
Section 211(o) of the Clean Air Act defines “renewable fuel” and specifies many
of the details of the renewable fuel program. The following section provides EPA’s
views and interpretations on issues related to what fuels may be counted towards
compliance with the RVO, and how they are counted.
1. What Is A Renewable Fuel That Can Be Used For Compliance?
The statutory definition of renewable fuel includes cellulosic ethanol and waste
derived ethanol. It includes biodiesel, as defined in the Energy Act. 13 It also includes all
motor vehicle fuels that are produced from biomass material such as grain, starch,
oilseeds, animal, or fish materials including fats, greases and oils, sugarcane, sugar beets,
13 As discussed below, for purposes of this rulemaking, the regulations separate “biodiesel” as defined in
the Energy Act, into biodiesel (diesels that meet the Energy Act’s definition and are a mono alkyl ester) and
renewable diesel (other diesels that meet the Energy Act’s definition but are not mono alky esters.
- 39 -