EERE Network News - 9/13/06

The U.S. Environmental Protection Agency (EPA) proposed rules last week for a national program requiring increasing levels of renewable fuels production over the next six years. The Renewable Fuels Standard (RFS) Program, authorized by the Energy Policy Act of 2005, requires 4.7 billion gallons of biofuels production in 2007, increasing gradually to 7.5 billion gallons in 2012. To meet that requirement, the new regulation proposes that 3.71 percent of all the gasoline sold or dispensed to U.S. motorists in 2007 be renewable fuel. The rule contains compliance tools and a credit and trading system that is integral to the overall program. The system allows renewable fuels to be used where they are most economical, while providing a flexible means for industry to comply with the standard.

The RFS Program is designed to cut petroleum use by approximately 3.9 billion gallons a year in 2012 and reduce greenhouse gas emissions by up to 14 million tons annually. But as noted in the August 30th edition of this newsletter, the ethanol fuel industry is already on track to far exceed the requirements of the RFS, with an existing capacity to produce 4.8 billion gallons of ethanol per year and facilities under construction that will boost that capacity to 7.6 billion gallons of ethanol. Unless the industry experiences a downturn and some production capacity goes uncompleted or unused, the ethanol fuel industry should easily exceed the RFS requirements.

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