Abstract
In the farmdoc daily article of May 26, 2016, we reviewed the EPA’s final rule making for the Renewable Fuels Standards (RFS) for 2014-16 and the preliminary rulemaking for 2017 to determine if the implied conventional biofuels (ethanol) mandates represented a “push” beyond the E10 blend wall. The magnitude of the push is calculated as the difference between the implied conventional mandate and the expected level of consumption of conventional (non-advanced) ethanol. We concluded that the EPA policy of establishing mandates high enough to provide a push revealed in the November 2015 final rulemaking for 2014-2016 was continued in the 2017 preliminary rulemaking. Based on projections of domestic gasoline consumption that exceed EPA projections, we calculated that the magnitude of the push for conventional ethanol exceeds 500 million gallons for both 2016 and 2017. To date, the conventional ethanol gap has been filled primarily by increasing the use of biodiesel and renewable diesel. At the same time, the EPA raised the biomass-based diesel (“biodiesel”) mandate from 1.9 billion gallons in 2016, to 2.0 billion gallons in 2017, and 2.1 billion gallons in 2018. Additionally, the EPA has reduced the total advanced biofuels mandate by less than the reduction in the cellulosic mandate, resulting in increased mandates for undifferentiated advanced biofuels which include biodiesel and renewable diesel.
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