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December 19, 2007 – President Bush signed into law legislation that will bring about more fuel-efficient vehicles and require wider use of ethanol, calling it "a major step" toward energy independence and easing global warming. The energy bill includes a 36-billion gallon renewable fuels standard (RFS) by 2022 of which 15 billion gallons comes from corn. The original RFS established in the 2005 Policy Act called for 7.5 billion gallons of annual use by 2012. Significantly, the RFS requires that 21 billion gallons of the standard must come from advanced biofuels, including a requirement that 16 billion gallons come from cellulosic ethanol by 2022. The bill also asks for studies on the feasibility of ethanol pipelines, higher blend levels, and the optimization of flex fuel vehicles. In addition, it increases the Corporate Average Fuel Economy (CAFE) standards to 35 miles per gallon by 2020, the first congressional increase in 32 years.
From the Renewable Fuels Association, www.ethanolrfa.org/resource/standard/
2007 ENERGY BILL AND THE RENEWABLE FUELS STANDARD
On December 19, 2007, the Energy Independence and Security Act of 2007 (H.R. 6) was signed into law. This comprehensive energy legislation amends the Renewable Fuels Standard (RFS) signed into law in 2005, growing to 36 billion gallons in 2022. By doing so, the bill seizes on the potential that renewable fuels offer to reduce foreign oil dependence and greenhouse gas emissions and provide meaningful economic opportunity across this country, putting America firmly on a path toward greater energy stability and sustainability.
According to a January 2008 study, the economic impact of a 36 billion gallon RFS is as follows:
- will add more than $1.7 trillion to the Gross Domestic Product between 2008 and 2022;
- generate an additional $436 billion of household income for all Americans during the same time period;
- support the creation of as many as 1.1 million new jobs in all sectors of the economy; and,
- generate $209 billion in new Federal tax receipts.
(Source: Economic Impact of the Energy Independence and Security Act of 2007, LECG LLC.)
Summary of the Biofuels Provisions - Title II
DEFINITIONS (Sec. 201)
Establishes definitions for the renewable fuels program, including conventional biofuel, advanced biofuels, cellulosic biofuels and biomass-based diesel.
- Conventional biofuel is ethanol derived from corn starch. Conventional ethanol facilities that commence construction after the date of enactment must achieve a 20 percent greenhouse gas (GHG) emissions reduction compared to baseline lifecycle GHG emissions. The 20 percent GHG emissions reduction requirement may be adjusted to a lower percentage (but not less than 10 percent) by the U.S. Environmental Protection Agency (EPA) Administrator if it is determined the requirement is not feasible for conventional biofuels.
- Advanced biofuels is renewable fuel other than ethanol derived from corn starch, that is derived from renewable biomass, and achieves a 50 percent GHG emissions reduction requirement. The definition – and the schedule -- of advanced biofuels include cellulosic biofuels and biomass-based diesel. The 50 percent GHG emissions reduction requirement may be adjusted to a lower percentage (but not less than 40 percent) by the Administrator if it is determined the requirement is not feasible for advanced biofuels. (Cellulosic biofuels that do not meet the 60 percent threshold, but do meet the 50 percent threshold, may qualify as an advanced biofuel.)
- Cellulosic biofuels is renewable fuel derived from any cellulose, hemicellulose, or lignin, that is derived from renewable biomass, and achieves a 60 percent GHG emission reduction requirement. The 60 percent GHG emissions reduction requirement may be adjusted to a lower percentage (but not less than 50 percent) by the Administrator if it is determined the requirement is not feasible for cellulosic biofuels.
RENEWABLE FUEL STANDARD (Sec. 202)
- Directs EPA to promulgate regulations ensuring that applicable volumes of renewable fuel are sold or introduced into commerce in the United States annually.
- Regulations apply to refiners, blenders and importers.
- The applicable volume for 2008 is set at 9.0 billion gallons.
- Sets forth a phase-in for renewable fuel volumes beginning with 9 billion gallons in 2008 and ending at 36 billion gallons in 2022.
Year |
Renewable
Biofuel |
Advanced
Biofuel |
Cellulosic
Biofuel |
Biomass-based Diesel |
Undifferentiated
Advanced Biofuel |
Total RFS |
2008 |
9.0 |
|
|
|
|
9.0 |
2009 |
10.5 |
.6 |
|
.5 |
0.1 |
11.1 |
2010 |
12 |
.95 |
.1 |
.65 |
0.2 |
12.95 |
2011 |
12.6 |
1.35 |
.25 |
.8 |
0.3 |
13.95 |
2012 |
13.2 |
2 |
.5 |
1 |
0.5 |
15.2 |
2013 |
13.8 |
2.75 |
1 |
|
1.75 |
16.55 |
2014 |
14.4 |
3.75 |
1.75 |
|
2 |
18.15 |
2015 |
15 |
5.5 |
3 |
|
2.5 |
20.5 |
2016 |
15 |
7.25 |
4.25 |
|
3.0 |
22.25 |
2017 |
15 |
9 |
5.5 |
|
3.5 |
24 |
2018 |
15 |
11 |
7 |
|
4.0 |
26 |
2019 |
15 |
13 |
8.5 |
|
4.5 |
28 |
2020 |
15 |
15 |
10.5 |
|
4.5 |
30 |
2021 |
15 |
18 |
13.5 |
|
4.5 |
33 |
2022 |
15 |
21 |
16 |
|
5 |
36 |
WAIVERS (Sec. 202)
- Authorizes the EPA Administrator by his own motion, one or more States, or a refiner/blender to petition for a waiver of the renewable fuels mandate. Following public notice and comment, the Administrator is authorized to waive the renewable fuels mandate if the Administrator determines that implementing the requirement would severely harm the economy or the environment, or that there is inadequate domestic supply to meet the requirement.
- Authorizes a separate waiver provision for cellulosic biofuels if the minimum volume requirement is not met. The Administrator is authorized to reduce the applicable volume of required cellulosic biofuels, and make available for sale a cellulosic biofuels credit at the higher of $0.25 per gallon or the amount by which $3.00 per gallon exceeds the average wholesale price of a gallon of gasoline (in the U.S.).
- Beginning in 2017, if the EPA Administrator waives at least 20 percent of the mandate for two consecutive years, or waives 50 percent of the mandate for a single year, the Administrator is authorized to modify the volume requirement for the remaining years of the renewable fuels mandate.
GRANTS
- Authorizes $500 million annually for FY08-FY15 for the production of advanced biofuels that have at least an 80 percent reduction in lifecycle GHG emissions relative to current fuels. (Sec. 207)
- Authorizes $25 million annually for FY08-FY10 for R&D and commercial application of biofuels production in states with low rates of ethanol and cellulosic ethanol production. (Sec. 223)
- Authorizes a $200 million grant program for FY08-FY14 for the installation of refueling infrastructure for E-85. (Sec. 244)
BIOFUELS INFRASTRUCTURE
- Amends the Petroleum Marketing Practices Act to make it unlawful for a franchiser to prohibit a franchise from installing E-85 or B-20 tanks and pumps within the franchise agreement. (Sec. 241)
- Requires the Secretary of Energy to report to Congress on the market penetration of flexible fuel vehicles and on the feasibility of requiring fuel retailers to install E-85 infrastructure. (Sec. 242)
- Requires the head of each federal agency to install at least one renewable fuel pump at each federal fleet refueling center by January 1, 2010. (Sec. 246)
STUDIES
- Directs the Secretary of Energy, in consultation with the Secretary of Transportation, to report on the feasibility of constructing dedicated ethanol pipelines. (Sec. 243)
- Directs the Secretary of Energy to study whether optimizing flexible fuel vehicles to run on E-85 would increase their fuel efficiency. (Sec. 225)
- Directs the Secretary of Energy, in consultation with the Secretary of Transportation, to report on the adequacy of railroad transportation of domestically produced renewable fuel. (Sec. 245)
- Directs the National Academy of Sciences to study the impact of the RFS program on each industry relating to the production of feed grains, livestock, food, forest products and energy. (Sec. 203)
ANTI-BACKSLIDING
- Requires EPA to study the potential adverse effects to air quality from the expanded RFS, and to promulgate regulations to mitigate those effects. (Sec. 209)
MISCELLANEOUS
- Prohibits the introduction of new renewable fuels or renewable fuel additives unless EPA explicitly grants a waiver under Sec. 211(f) of the Clean Air Act. EPA is required to take final action within 270 days of receipt of the waiver request. (Sec. 251)
- Amends Sec. 932 of the Energy Policy Act of 2005 to include research on energy efficiency at biorefineries and on technology to convert existing corn-based ethanol plants to process cellulosic materials. (Sec. 224)
- Requires the establishment of at least seven bioresearch centers that focus on biofuels. (Sec. 233)
- Requires EPA, in consultation with the Secretary of Energy and the Secretary of Agriculture, to report to Congress on the impacts of the RFS program on environmental issues, resource conservation issues, the growth and use of cultivated, invasive and noxious plants and their impact on the environment and agriculture. (Sec. 204)
- Directs the Secretary of Energy, in consultation with the Secretary of Transportation and the Administrator of EPA, to establish a R&D and demonstration program relating to existing transportation fuel distribution infrastructure and new alternative distribution infrastructure that focus on the physical and chemical properties of biofuels and efforts to prevent or mitigate against adverse impacts of those properties. (Sec. 248)
- Expands EPA’s authority to control engines, vehicles, fuels and fuel additives under Sec. 211(c) of the Clean Air Act to include effects on water pollution. (Sec. 208)
- Directs the Secretary of Energy to establish a technology transfer center to provide information on biofuels and biorefineries. (Sec. 229)
BIOFUELS TAX PROVISIONS
- There is NO biofuels tax provision included in H.R. 6.
ENACTMENT
- H.R. 6 will take effect on January 1, 2009 (with the exception of the 9.0 billion gallon volume requirement for the existing RFS program that will take effect in 2008). (Sec. 210)
June 15, 2007 – Senate adopts U.S. Energy Goals.
The U.S. Senate adopted by unanimous consent a resolution calling for a new national renewable energy goal: 25 percent of the nation's energy supply from renewable sources by 2025. The resolution, which builds on a vision developed by a broad coalition of agriculture, forestry, industry, and environmental leaders, was adopted by voice vote as an amendment to the energy legislation currently under consideration on the Senate floor. The goal calls for 25 percent of the nation's energy needs being met with renewable resources from farms, forests and ranches by 2025.
April 2007 – EPA Finalizes Regulations for a Renewable Fuel Standard.
The U.S. Environmental Protection Agency (EPA) has established a national renewable fuel program (the Renewable Fuel Standard Program, or RFS program). The program is designed to encourage the blending of renewable fuels into our nation's motor vehicle fuel. This rule establishes the annual renewable fuel standards, responsibilities of refiners and other fuel producers, a trading system and other compliance mechanisms, and recordkeeping and reporting requirements. In addition to the rule, EPA has published a Regulatory Impact Analysis (RIA), which contains analyses of the economic and environmental impacts of the expanded use of renewable fuels under this program.
March 20, 2007 – President Bush unveils his “Twenty in Ten” plan.
President Bush Directed The U.S. Environmental Protection Agency (EPA) And The U.S. Departments Of Energy (DOE), Transportation (DOT), and Agriculture (USDA) to take the first steps toward regulations using the "Twenty In Ten" Plan as a starting point. The President has directed these agencies to take the first steps toward regulations that would cut gasoline consumption and greenhouse gas emissions from motor vehicles, using as a starting point his "Twenty in Ten" plan to reduce U.S. gasoline consumption by 20 percent over the next 10 years by increasing the supply of renewable (i.e. ethanol) and other alternative fuels and making motor vehicles more energy efficient.
2005 – The Energy Policy Act of 2005 and the Establishment of the Renewable Fuels Standard
The Energy Policy Act of 2005 amended the Clean Air Act to establish a Renewable Fuel Standard program. The U.S. Congress gave EPA the responsibility to coordinate with the U.S. Department of Energy, the U.S. Department of Agriculture, and stakeholders to design and implement this first-of-its-kind program. Three months after the Energy Policy Act of 2005 was signed, in December 2005, EPA set a statutory default standard that required that 2.78 percent of the gasoline sold or dispensed in calendar year 2006 be renewable fuel. Today’s rulemaking establishes a comprehensive RFS program for 2007 through 2012 and beyond.
A renewable fuel is defined in the Energy Policy Act as a motor vehicle fuel that is produced from plant or animal products or wastes, as opposed to fossil fuel sources. Renewable fuels include ethanol, biodiesel and other motor vehicle fuels made from renewable sources.
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