December 2013 Question of the Month

Question of the Month: What is the current status of the Renewable Fuel Standard (RFS) and how do the new 2014 proposed requirements differ from previous years’?

Answer: The national RFS program was developed to increase the volume of renewable fuel blended into transportation fuels. As required by the Energy Policy Act of 2005, the U.S. Environmental Protection Agency (EPA) finalized RFS1 program regulations, which became effective on Sept. 1, 2007. The Energy Independence and Security Act (EISA) of 2007 increased and expanded this standard through RFS2, mandating that by 2022, 36 billion gallons of renewable fuel be blended into transportation fuels. Though EISA set final volume requirements, EPA must determine renewable fuel percentage values annually to meet the requirements. Fuels are broken down as follows:

Total renewable fuel: The total amount of renewable fuel required to be blended into the fuel supply each year, which includes conventional and advanced biofuels (defined below). Conventional biofuel volume requirements are simply the total renewable fuel volume requirements minus the advanced biofuel volume requirements. While EISA specified volume requirements for most categories through 2022, the statute allows EPA to reduce these volumes under certain conditions (see below for further discussion).  Each renewable fuel category is described below.

• Conventional biofuel: Any fuel derived from approved sources of renewable biomass that reduces greenhouse gas (GHG) emissions by at least 20% from baseline petroleum GHG emissions. Conventional biofuels are generally produced from starch-based feedstocks (e.g., corn, sorghum, wheat).
• Advanced biofuel: Any fuel derived from approved renewable biomass, excluding corn starch-based ethanol. Biomass-based diesel and cellulosic biofuel volume requirements fall under this overarching advanced biofuel category. Note that remaining advanced biofuel volume requirements not met by cellulosic and biomass-based diesel can be met with other advanced biofuels, and cellulosic biofuel and biomass-based diesel volumes that exceed their volume requirements also may be used to meet the advanced biofuel quota. Other advanced biofuels may include sugarcane-based fuels, renewable diesel co-processed with petroleum, and other biofuels that may exist in the future. Advanced biofuels must reduce GHG emissions by at least 50% from baseline petroleum GHG emissions.
• Cellulosic biofuel: Any fuel derived from cellulose, hemicellulose, or lignin. These fuels must reduce GHG emissions by at least 60% from baseline petroleum GHG emissions.
• Biomass-based diesel: A diesel fuel substitute made from renewable feedstocks, including biodiesel and nonester renewable diesel (diesel produced from animal- and plant-based fats, oils, and greases). It cannot be co-processed with petroleum; however, those fuels fall under the general advanced biofuels category. Biomass-based diesel must reduce GHG emissions by at least 50% from baseline petroleum GHG emissions.

For a list of fuel pathways that qualify under each renewable fuel category, see Title 40 of the Code of Federal Regulations, section 80.1100-80.1167.

Obligated Parties
Any party that produces gasoline or petroleum diesel for use as transportation fuel in the United States, including refiners, importers, and blenders (other than oxygenate blenders), is considered an obligated party under the RFS program. Each year, EPA determines the Renewable Volume Obligation (RVO) for obligated parties. The RVO is calculated as a percentage, by dividing the amount of renewable fuel (gallons) required by the RFS2 for a given year by the amount of transportation fuel expected to be used during that year.

Volume Requirements and Percentage Standards
While EISA specified most volume requirements through 2022, the law did not address the biomass-based diesel requirement beyond 2012 and left some flexibility on the cellulosic biofuel requirement. The statute also allows EPA to change requirements under certain conditions, including when (1) the projected production of cellulosic biofuel in any year is less than the volume specified in EISA or (2) conditions are met under the general waiver authority provided by the Clean Air Act.

In 2013, EPA requires obligated parties to meet the following volume requirements collectively. Also included are the associated RVO percentages.

Final Volume Requirements for 2013
Category	Volume	Percentage
Cellulosic biofuel	14 million gallons	0.008%
Biomass-based diesel	1.28 million gallons	1.12%
Advanced biofuel	2.75 billion gallons	1.60%
Total renewable fuel	16.55 billion gallons	9.63%

On Nov. 15, 2013, EPA published a proposed rule to establish new volume requirements and associated percentage standards for 2014. For the first time, EPA is requesting comments on a range of volumes for each renewable fuel category to determine a final requirement (see table below). Also for the first time, the proposed total renewable fuel volume requirement is lower than statutory levels mandated in EISA to resolve compliance concerns related to the ethanol consumption "blend wall" (discussed below) and renewable fuel production constraints. The table below outlines the proposed new volume requirements and the associated RVO percentages.

Proposed Volume Requirements for 2014
Category	Volume	Percentage	Range
Cellulosic biofuel	17 million gallons	0.010%	8-30 million gallons
Biomass-based diesel	1.28 billion gallons	1.16%	1.28 billion gallons
Advanced biofuel	2.20 billion gallons	1.33%	2-2.51 billion gallons
Total renewable fuel	15.21 billion gallons	9.20%	15-15.52 billions gallons

Ethanol Blend Wall The ethanol “blend wall” refers to the difficulty of incorporating an increasing amount of ethanol into the transportation fuel supply at percentages exceeding 10%. Almost all gasoline sold in the United States is E10 (10% ethanol, 90% gasoline). While blends as high as E15 (15% ethanol, 85% gasoline) can be used in some conventional vehicles, these blends are difficult to market on a widespread basis because they can be used only in flexible fuel vehicles (FFVs) and model year 2001 and newer vehicles due to equipment compatibility issues. Additionally, “E85” (51%–83% ethanol blended with gasoline) and other mid-level ethanol blends can be used only in FFVs. EPA has proposed the lower advanced biofuel and total renewable fuel volume requirements above for 2014 due to the anticipated inability of the market to supply the Congressionally mandated volume of renewable fuels to consumers in 2014.

In conjunction with the 2014 volume requirements and percentage standards, EPA is also considering a joint petition from the American Petroleum Institute and the American Fuel & Petrochemical Manufacturers, as well as individual petitions from several refining companies, requesting a partial waiver of the 2014 applicable volumes under RFS2. EPA is collecting comments on both issues through Jan. 28, 2014.

 Here is the proposed rule and EPA fact sheet.

Additional information can be found on the EPA RFS2 and Alternative Fuels Data Center RFS Program websites.

Clean Cities Technical Response Service Team
technicalresponse@icfi.com
800-254-6735

November 2013 Question of the Month

Question of the Month: What are the key terms to know when discussing ethanol flexible fuel vehicles (FFVs) and their fueling infrastructure?

Answer: It is important to know how to “talk the talk” when it comes to FFVs. Becoming familiar with the terms below will help you better understand these vehicles and the associated fueling infrastructure so that you can ask the right questions and make informed decisions.

FFV: An FFV is a vehicle that has an internal combustion engine and can run on E85 (defined below), gasoline, or a mixture of the two. Except for fuel system and powertrain adjustments that allow the vehicles to run on higher ethanol blends, FFVs are virtually identical to their conventional gasoline vehicle counterparts; however, drivers can expect a slightly lower fuel economy when driving on ethanol compared to gasoline, depending on the ethanol blend.

Types of Ethanol
Ethanol can be categorized into two main types based on the feedstocks used for its production:

• Starch- and sugar-based ethanol: Produced from feedstocks like corn, wheat, milo, and sugarcane, starch- and sugar-based ethanol makes up the majority of all domestic ethanol production. In fact, corn is the most common ethanol feedstock in the United States. This type of ethanol is manufactured through dry- or wet-mill processing. More than 80% of ethanol plants are dry mills due to lower capital costs. Dry-milling consists of grinding corn into flour and fermenting the mixture, resulting in distiller grain and carbon dioxide co-products. Wet mills separate the starch, protein, and fiber in corn prior to processing these components into products, such as ethanol.
• Cellulosic ethanol: Produced from feedstocks like crop and wood residues, dedicated energy crops, and industrial and other wastes, cellulosic ethanol offers advantages over starch- and sugar-based feedstocks (e.g., no concerns with food versus fuel). Feedstock components include cellulose, hemicellulose, and lignin. Because it is more challenging to extract sugars necessary for ethanol production from these feedstocks, cellulosic ethanol is more difficult to manufacture than starch- and sugar-based ethanol. This type of ethanol can be produced through two conversion pathways:  
• Biochemical: Feedstocks are pretreated to release hemicellulose sugars and then undergo hydrolysis to break cellulose into sugars. Sugars are fermented into ethanol, and lignin is recovered and used to produce energy to power the process.
• Thermochemical: Heat and chemicals are added to feedstocks to create a mixture of carbon dioxide and hydrogen, also known as syngas. Syngas is then mixed with a catalyst to produce ethanol. 

Ethanol Blends
The following ethanol blends can be used in conventional gasoline vehicles (note model year restrictions for E15):

• E10: (10% ethanol, 90% gasoline) – E10 is classified as "substantially similar" to gasoline by the U.S. Environmental Protection Agency (EPA) and is legal for use in any gasoline-powered vehicle. More than 95% of the U.S. gasoline supply contains up to 10% ethanol to boost octane, meet air quality requirements, or satisfy the Renewable Fuel Standard (RFS2), which calls for 36 billion gallons of biofuels to be blended into transportation fuel by 2022. E10 must meet ASTM D4806 fuel specifications. ASTM International develops specifications for conventional and alternative fuels to ensure proper vehicle operation and safety.
• E15: (15% ethanol, 85% gasoline) – E15 is legal for use in model year 2001 and newer vehicles; however, there are several EPA and state agency requirements and regulations stations must adhere to when selling E15. Fuel producers that market E15 are required to individually register with EPA. While E15 does not qualify as an alternative fuel under the Energy Policy Act of 1992 (EPAct), it does help meet RFS2. E15 must meet fuel specifications laid out in ASTM D4806 and cannot be used in motorcycles, heavy-duty vehicles, off-road vehicles, or off-road equipment.

The following ethanol blends above E15 should only be used in FFVs due to material and compatibility issues associated with the high alcohol content of ethanol:

• Mid-level blends: Blender pumps (defined below) can create various other ethanol blends between E15 and E85 (also defined below). E20 (20% ethanol, 80% gasoline) and E30 (30% ethanol, 70% gasoline) are the most common blends selected. Mid-level ethanol blends must meet fuel specifications laid out in ASTM D7794. 
• E85: E85 is considered an alternative fuel under EPAct and can contain 51% to 83% ethanol, depending on geography and season. This variance in ethanol content is allowed to ensure proper starting and vehicle performance in geographic locations where cold temperatures can affect fuel properties. Though dependent on the blend, drivers can expect about 27% less energy per gallon than gasoline, resulting in a corresponding reduction in fuel economy, when using E85. E85 must meet ASTM D5798 fuel specifications.  

Infrastructure
Low-level ethanol blends up to E10 have already been incorporated into the majority of the U.S. gasoline supply, and fueling stations that supply these blends are not required to update their fueling infrastructure. Ethanol blends above E10, however, do require specific ethanol-compatible equipment, including:

• Dispensers: E85 and blender pump dispensers require specialized metals and seals to perform with high concentrations of ethanol. Permitting authorities typically require all ethanol dispensers to be UL-listed for the ethanol blend dispensed.
• Hanging hardware: Hanging hardware, including hoses, nozzles, swivels, and breakaways used to dispense ethanol blends should use ethanol compatible materials. Permitting authorities typically require hanging hardware to be UL-listed for the ethanol blend dispensed.
• Storage tanks: EPA guidance allows underground storage tank (UST) manufacturers to provide a statement of compatibility for their products with specific biofuels blends. All tank manufacturers have issued statements of compatibility with ethanol blends. For a list of UST manufacturers and their ethanol-compatibility statements, please refer to the Clean Cities Handbook for Handling, Storing, and Dispensing E85 and Other Ethanol-Gasoline Blends (http://www.afdc.energy.gov/uploads/publication/ethanol_handbook.pdf)

Most stations that dispense mid-level blends also have the following:

• Blender pump: This type of fuel dispenser offers FFV owners a variety of ethanol-blended gasoline products between E15 and E85. Blender pumps draw fuel from two separate storage tanks (E10 and E85) and can dispense preprogrammed blends of those fuels. Blender pumps also may be used to dispense E15 legally. Note that blender pumps currently are offered only at select fueling stations and are mainly concentrated in the Midwest. The Alternative Fuels Data Center (AFDC) Fueling Station Locator (http://www.afdc.energy.gov/locator/stations/) includes details about E85 stations with blender pump availability. 

Additional information on FFVs, ethanol feedstocks, and infrastructure can be found on the AFDC Ethanol website (http://www.afdc.energy.gov/fuels/ethanol.html).


Clean Cities Technical Response Service Team
technicalresponse@icfi.com
800-254-6735

EPA Finalizes 2013 Renewable Fuel Standards

EPA Finalizes 2013 Renewable Fuel Standards to Help Promote American Energy Independence, Reduce Carbon Pollution

EPA also announces steps to address concerns about the E10 blend wall

WASHINGTON – As part of an ongoing effort to enhance energy security and reduce carbon pollution, the U.S. Environmental Protection Agency (EPA) today finalized the 2013 percentage standards for four fuel categories that are part of the Renewable Fuel Standard (RFS) program established by Congress. Most of these fuels are produced by American farmers and growers domestically and help reduce the carbon pollution that contributes to climate change.

The final 2013 overall volumes and standards require 16.55 billion gallons of renewable fuels to be blended into the U.S.fuel supply (a 9.74 percent blend). This standard specifically requires:
•           Biomass-based diesel (1.28 billion gallons; 1.13 percent)
•           Advanced biofuels (2.75 billion gallons; 1.62 percent)
•           Cellulosic biofuels (6.00 million gallons; 0.004 percent)

These standards reflect EPA’s updated production projections, which are informed by extensive engagement with industry and a thorough assessment of the biofuels market.

During this rulemaking, EPA received comments from a number of stakeholders concerning the “E10 blend wall.” Projected to occur in 2014, the “E10 blend wall” refers to the difficulty in incorporating ethanol into the fuel supply at volumes exceeding those achieved by the sale of nearly all gasoline as E10. Most gasoline sold in the U.S. today is E10. In the rule issued today, EPA is announcing that it will propose to use flexibilities in the RFS statute to reduce both the advanced biofuel and total renewable volumes in the forthcoming 2014 RFS volume requirement proposal.

EPA is also providing greater lead time and flexibility in complying with the 2013 volume requirements by extending the deadline to comply with the 2013 standards by four months, to June 30, 2014.

A January 2013 ruling by the U.S. Court of Appeals required the agency to reevaluate projections for cellulosic biofuel to reflect market conditions; the final 2013 standard for cellulosic biofuel announced today was developed in a manner consistent with the approach outlined in that ruling.

The Energy Independence and Security Act (EISA) established the RFS program and the annual renewable fuel volume targets, which steadily increase to an overall level of 36 billion gallons in 2022. To achieve these volumes, EPA calculates a percentage-based standard for the following year. Based on the standard, each refiner and importer determines the minimum volume of renewable fuel that it must ensure is used in its transportation fuel.

More information on the standards and regulations: http://www.epa.gov/otaq/fuels/renewablefuels/regulations.htm
More information on renewable fuels: http://www.epa.gov/otaq/fuels/renewablefuels/index.htm