Ethanol producers dispute EPA decision to lower 2014 RFS blending requirements

Following last year’s announcement that the Environmental Protection Agency (EPA) would seek to reduce the amount of ethanol in the nation’s fuel supply for the first time since the 2007 Renewable Fuel Standard (RFS) was passed, the producers of these renewable fuels are fighting back and claiming that EPA’s proposal is in clear violation of the Clean Air Act, according to the Automotive Aftermarket Industry Association (AAIA). The producers’ argument, laid out in their comments on EPA’s proposed rule, states that EPA is improperly using its waiver authority under the Clean Air Act to set in motion a reduction in the RFS blending requirements.

Under the act, EPA has the authority to reduce the mandated level only in the case of inadequate domestic fuel supply or severe economic harm brought on by the requirement. In this case, EPA has taken a broad interpretation of the “inadequate domestic supply” stipulation and justified its decision by citing a lack of demand for higher ethanol blends. The renewable fuel industry contends that this unprecedented reduction will lead to both regulatory uncertainty and decreased investment in biofuels.

Under the RFS, 18.15 billion gallons of renewable fuels were required for blending in 2014; however, EPA is now requiring only 15.21 billion gallons. Food producers and petroleum refiners have come out in support of the EPA proposal.

Comments on EPA’s proposed rule closed on Jan. 28.