The US Environmental Protection Agency (EPA) will not meet a statutory deadline to finalize new biofuel blending targets this year, the White House has indicated, leaving future policy up to the winner of this year's presidential election.
Instead, the agency is targeting March 2025 to propose renewable fuel standard (RFS) obligations for 2026 and December next year to finalize the regulation. EPA is technically supposed to finalize 2026 obligations by November this year. The delay is certain to frustrate biofuel producers who have warned that policy uncertainty is risking planned investments and capacity expansions.
A summary of the agency's plan, included in a biannual regulatory agenda released by the White House on 5 June, says the regulation will set volume requirements and accompanying percentage standards for cellulosic biofuels, biomass-based diesel, advanced biofuels, and total renewable fuel.
The rule will also include "several regulatory changes to the RFS program intended to improve the program's implementation," the agenda said. The Biden administration has flirted with changes to the RFS before, including a potential credit-generating pathway for electricity from renewable natural gas that powers vehicles.
The agenda, though brief and thus not necessarily reflective of all of EPA's plans, makes no mention of prospective blending targets for any year beyond 2026 or of adjustments to existing targets. Clean Fuels Alliance America, which represents biomass-based diesel and sustainable aviation fuel companies and which asked EPA last month to hike its 2024 and 2025 blending obligations, said the "announced timing is disappointing" and "will reverberate throughout the program, creating uncertainty for all stakeholders."
The full agenda, which includes timelines for hundreds of regulations from various agencies, also appears to make no reference to expected Treasury Department guidance on a clean fuels tax credit kicking off next year or to a related Department of Agriculture effort to quantify the benefits of "climate-smart" agricultural practices. Timelines for finalizing guidance around other Inflation Reduction Act tax credits are included, conversely.
Biofuel production margins have slipped this year, as ample supply of renewable diesel has contributed to price declines for RFS and state low-carbon fuel standard credits. These tradeable credits, which covered sources submit to regulators as proof of compliance, also act as a source of revenue and an incentive to produce low-carbon fuels.
Biofuels producers and feedstock suppliers have advocated that the Biden administration act quickly in response by setting new renewable fuel obligations and clear guidance around the 45Z credit. Prolonged uncertainty could prompt more biorefinery closures, these groups argue, risking the administration's climate and clean fuel goals.
EPA did not immediately provide comment but said last month that it will factor a recent surge of feedstock imports, including used cooking oil, into its decisions about future RFS volume requirements.
