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

4. What Are “Equivalence Values” For Renewable Fuel?
One question that EPA must address is how to count volumes of renewable fuel in
determining compliance with the renewable volume obligation. For instance, the Act
stipulates that every gallon of cellulosic ethanol should count as if it were 2.5 gallons for
RFS compliance purposes. The Act does not stipulate similar values for other renewable
fuels, but as described below we believe it is appropriate to do so.
We are proposing that the “Equivalence Values” for different renewable fuels be
based on their energy content in comparison to the energy content of ethanol, and
adjusted as necessary for their renewable content. The result is an Equivalence Value for
corn ethanol of 1.0, for biobutanol of 1.3, for biodiesel (mono alkyl ester) of 1.5, and for
cellulosic ethanol of 2.5. However, the methodology can be used to determine the
appropriate equivalence value for any other potential renewable fuel as well.
This section describes why we believe that the use of relative energy content is
appropriate under the Act, and our investigation of the alternative use of lifecycle
analyses as the basis of Equivalence Values.
a. Authority Under The Act To Establish Equivalence Values
We are proposing that Equivalence Values be assigned to every renewable fuel to
provide an indication of the number of gallons that can be claimed for compliance
purposes for every physical gallon of renewable fuel. An Equivalence Value of 1.0
would mean that every physical gallon of renewable fuel would count as one gallon for
RFS compliance purposes. An Equivalence Value greater than 1.0 would mean that
every physical gallon of renewable fuel would count as more than one gallon for RFS
compliance purposes, while a value less than 1.0 would count as less than one gallon.
We are interpreting the Act as allowing EPA to develop Equivalence Values
according to the methodology discussed below. We believe that the use of Equivalence
Values is consistent with the intent of Congress to treat different renewable fuels
differently in different circumstances, and to provide incentives for use of renewable
fuels in certain circumstances, as evidenced by those specific circumstances addressed by
Congress. The Act has several provisions that provide for mechanisms other than straight
volume measurement to determine the value of a renewable fuel in terms of RFS
compliance. For example, 1 gallon of cellulosic biomass or waste derived ethanol is to
be treated as 2.5 gallons of renewable fuel. EPA is also required to establish an
“appropriate amount of credits” for biodiesel, and to provide for “an appropriate amount
of credit” for using more renewable fuels than are required to meet your obligation. EPA
is also to determine the “renewable fuel portion” of a blending component derived from a
renewable fuel. All of these statutory provisions provide evidence that Congress did not
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