Government Cuts Biofuels Targets

The Environmental Protection Agency has proposed lowering next year’s production targets for biofuels in the U.S. fuel mix—targets initially set in the Energy Independence & Security Act of 2007. Although the petroleum industry says the new targets still call for too much ethanol, biofuels advocates say changes to the Renewable Fuel Standard could kill the fledgling advanced biofuels industry.

EPA proposes that fuel blenders use 15.21 billion gal of renewable fuel in 2014, a level lower than the law’s original 2014 target of 18.15 billion gal and even lower than this year’s target of 16.55 billion gal.

The proposal reflects a pattern of declining U.S. gasoline consumption and increasing production of corn ethanol. Nearly all gasoline sold in the U.S. now contains 10% ethanol, a historic cap. In 2010, EPA approved the use of a 15% ethanol-gasoline blend for some vehicles over strong objections from the petroleum industry.

Biofuels supporters say the uncertainty over production targets will hamper biofuel investments. “The current proposal would have the effect of closing the market to renewable fuels and undermining the investment community’s confidence in the program,” says Brent Erickson, a spokesman for the Biotechnology Industry Organization, a trade group that includes biofuels makers.

But the American Petroleum Institute, an oil industry trade association, says lower targets are not enough. “Ultimately, Congress must protect consumers by repealing this outdated and unworkable program once and for all,” API President Jack N. Gerard says.

The law was intended to drive development of renewable, domestically produced fuels to make the U.S. more energy independent and lower transportation-related greenhouse gas emissions. Although corn-based ethanol output has exceeded production expectations, advanced biofuels made from cellulosic biomass—which holds out the hope for a lower greenhouse gas emissions impact—have been slow to reach commercialization.

For 2014, the EPA proposal calls for 13.01 billion gal of conventional, or corn-based, ethanol and 2.20 billion gal of advanced biofuels not made from corn sugar, which will be mainly biodiesel. Notably, EPA expects only 17 million gal of cellulosic biofuels to enter the fuel supply in 2014; 1.75 billion gal was called for in the 2007 law.

After public comments, EPA will finalize the standard next spring.