WASHINGTON – On Monday, the Environmental Protection Agency (EPA) published its final rule on renewable volume obligations (RVOs) for 2014, 2015 and 2016 under the Renewable Fuel Standard (RFS) program. Though the final RVOs are higher than originally proposed by the EPA earlier this year, they are lower than the volumes set by Congress in 2007.

Rather than the 22.25 billion gallons required under federal law for 2016, the EPA will require 18.11 billion gallons of renewable fuels to be blended into the fuel supply in 2016.

During the rulemaking process, NACS shared several concerns with the EPA regarding the RFS program. First, NACS urged the EPA to exercise its waiver authority and adjust the volumes of renewable fuels that more accurately reflect the market conditions in order to avoid hitting the blendwall—the point at which the requirements for renewable fuels consumption exceed the volume of compliance flexibilities under the rule.

NACS also shared the fact that retailers face several factors that limit the ability to blend higher levels of ethanol—liability issues with respect to equipment compatibility and misfueling, and consumer buying behavior. In response to some refiners working to change the obligated party to the blender from the refiner or importer, NACS expressed its strong opposition.

In the final rule, it is clear that the EPA listened to fuel retailers. The agency agreed that concerns regarding the blendwall exist and that the current market could not absorb the renewable volumes in statute for 2016. They also specifically mentioned our liability concerns as factors that limit the ability to expand the use of higher blends of ethanol and that mandating higher volumes would not overcome those obstacles. Finally, the EPA did not change the definition of what is considered an obligated party; they remain simply refiner and importer.

“While we won’t really know if the EPA got it right in avoiding the blendwall for a few months, we do think the agency provided some flexibility in compliance,” said Paige Anderson, director of government relations for NACS. “We are very pleased that the EPA exercised its waiver authority and brought the volumes below the statutory levels. The fact that the EPA expressly called out retailers’ concerns on liability and consumer buying habits shows they are listening to us. That’s a big deal.”

The final rules will go into effect February 12, 2016. The EPA has also stated that it will immediately begin work on 2017 RVOs with the goal of releasing its proposed rule by June 2016. NACS will continue to be actively engaged in this process.