EPA Decision to Deny Requests for
Waiver of the Renewable Fuel Standard
Background
• This summer, in light of drought conditions affecting the country, Governors
from several States requested a waiver of the national volume requirements
for the renewable fuel standard program (RFS),
• On August 30, 2012, EPA provided notice of the waiver requests and invited
public comment on issues relevant to making a decision on the requests,
• EPA's public written comment period on the waiver requests closed on
October 11, 2012. Nearly 30,000 comments were submitted,
• The renewable fuel program was adopted in the Energy Policy Act of 2005,
and was expanded in the Energy and Independence Security Act of 2007.
This program requires that transportation fuel sold in the United States
contain a minimum volume of renewable fuel,
• Section 211 (o)(7) of the Clean Air Act allows the Administrator of EPA,
in consultation with the Secretaries of Agriculture and Energy, to waive the
requirements of the RFS under certain criteria. The waiver could be issued
if the Administrator determines — after a notice and comment period — that
implementation of the RFS requirements would severely harm the economy
or environment of a State, a region, or the United States,
• EPA recognizes that this year's drought has created significant hardships in
many sectors of the economy, particularly for livestock producers. However,
the agency's extensive analysis makes clear that Congressional requirements
for a waiver have not been met and that waiving the RFS would have little,
if any, impact on ethanol demand or energy prices over the time period
analyzed.
SEPA
United States
Environmental Protection
Agency
Office of Transportation and Air Quality
EPA-420-F-12-075
November 2012
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Basis of EPA's Decision
• EPA is authorized to grant a waiver request if the agency determines that implementation of
the RFS mandate would severely harm the economy of a State, region, or the United States.
• EPA interpreted the waiver provision in a manner consistent with its prior response to a 2008
RFS waiver request from Texas. The provision provides narrow waiver authority:
• EPA would have to determine that the implementation of the mandate itself would severely
harm the economy; it is not enough to determine that implementation of RFS would
contribute to such harm;
• EPA would also have to find that there is a generally high degree of confidence that the
RFS is severely harming the economy; and
• This requirement calls for a high threshold for the nature and degree of harm that would
support the issuance of a waiver based on "severe harm" to the economy of a State,
region, or the United States.
• EPA examined a wide variety of evidence, including modeling of the impact that a waiver
would have on ethanol use, corn prices, and food prices. EPA also looked at empirical
evidence, such as the current price for renewable fuel credits, called RINs, which are used
to demonstrate compliance with the RFS mandate.
• EPA's analysis shows that it is highly unlikely that waiving the RFS volume requirements
will have a significant impact on ethanol production or use in the relevant time frame that a
waiver could apply (the 2012-2013 corn marketing season) and therefore little or no impact
on corn, food, or fuel prices We analyzed 500 scenarios, and in 89% of them we see no im-
pacts from the RFS program at all.
• Looking across all 500 scenarios, including those 11% of scenarios where RFS requirements
would have an impact on the corn and other markets, the average impact on corn prices is
only 7 cents a bushel, less than a one percent change in corn prices.
• EPA applied the detailed analysis to the statutory criteria for a waiver. EPA found that the
evidence did not support a determination that the criteria for a waiver had been met, and
therefore by law must deny the waiver.
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