EPA Proposes Renewable  Fuel
                   Standards for 2014, 2015, and 2016,
                   and the Biomass-Based  Diesel
                   Volume for  2017
                        Under the Clean Air Act (CAA), the U.S. Environmental
                        Protection Agency (EPA) is required to set the annual standards
                   for the Renewable Fuel Standard (RES) program for each year. This
                   regulatory action proposes to establish the annual percentage standards
                   for cellulosic biofuel, biomass-based diesel, advanced biofuel, and
                   total renewable fuels that apply to all gasoline and diesel produced or
                   imported in years 2014, 2015, and 2016. EPA is also proposing the
                   applicable volume of biomass-based diesel that will be required
                   in 2017.

                   The Clean Air Act provides EPA with the authority to reduce the volume require-
                   ments from their statutory targets under certain conditions, and we are proposing to
                   use these authorities in this action. EPA has evaluated the availability of qualifying
                   renewable fuels and factors that in some cases constrain the supply of those fuels
                   to the vehicles that can consume them. EPA has also considered the  ability of the
                   market to respond to the applicable standards by producing changes in production,
                   infrastructure, and relative pricing to boost the use of renewable fuels.

                   Based on these and other considerations, EPA is proposing volumes which, while be-
                   low the volumes originally set by Congress, would increase renewable fuel use in the
                   U.S. above historical levels and provide for steady growth over time.  In particular,
                   the proposed volumes would ensure continued growth in advanced biofuels, which
                   have a lower greenhouse gas emissions profile than conventional biofuels. EPA is also
                   proposing to increase the required volume of biomass-based diesel in  2015, 2016, and
                   2017 while maintaining the opportunity for growth in other advanced biofuels that is
                   needed over the long term.

                   Congress developed the renewable fuels program in an effort to reduce greenhouse
                   gas emissions and expand the nation's renewable fuels sector, while reducing reliance
&EPA
United States
Environmental Protection
Agency
Office of Transportation and Air Quality
                 EPA-420-F-15-028
                       May 2015

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on foreign oil. Biofuels are an important component in the Administration's efforts to enhance
energy security and address climate change.

EPA is seeking comment and any new data to inform setting the final volume standards, and will
hold a public hearing on June 25, 2015, in Kansas City, Kansas.

EPA intends to take final action on this proposal by November 30, 2015, which will return the
Agency to the program's statutory timeline for issuing RES annual rules.
Overview
Due to constraints in the fuel market to accommodate increasing volumes of ethanol, along
with limits on the availability of non-ethanol renewable fuels, the volume targets specified by
Congress in the Clean Air Act for 2014, 2015 and 2016 cannot be achieved. However, EPA
recognizes that the statutory volume targets were intended to be ambitious; Congress set targets
that envisioned growth at a pace that far exceeded historical growth rates. Congress clearly
intended the RES program to incentivize changes that would be unlikely to occur absent the
RES program. Thus while EPA is proposing to use the tools provided by Congress to waive the
annual volumes below the statutory levels, we are proposing standards that are directionally
consistent with Congress' clear goal of increasing renewable fuel production and use over time.
The proposed volumes would require significant growth in renewable fuel production and use
over historical levels. EPA believes the proposed standards to be ambitious but within reach of a
responsive marketplace.

There are two different authorities in the statute that permit EPA to reduce volumes of ad-
vanced biofuel and total renewable fuel below the volumes specified in the statute. When the
Agency lowers the applicable volume of cellulosic biofuel below the volume specified in the
CAA, we also have the authority to reduce the applicable volumes of advanced biofuel and
total renewable fuel by the same or a lesser amount. The Agency can also reduce the applicable
volumes of any renewable fuel under the CAA general waiver authority under certain condi-
tions, including where there is "inadequate domestic supply." This proposal uses a combination
of these two  authorities to reduce volumes of both advanced biofuel and total renewable fuel to
address two important constraints:

    •   Limitations in the volume of ethanol that can be consumed given practical constraints
    on the supply of higher ethanol blends to the vehicles that can use  them

    •   Limitations in the ability of the industry to produce sufficient volumes of qualifying
    renewable fuel, particularly non-ethanol fuels

EPA is proposing to set the renewable fuel standards for 2014 at the levels that were actually
produced and used as transportation fuel, heating oil or jet fuel in the contiguous U.S.  and
Hawaii. For 2015 and 2016, EPA is proposing ambitious increases in both advanced biofuel and
total renewable fuel in comparison to 2014 levels. This proposed rulemaking also provides an
evaluation of the expected volumes of cellulosic biofuel for 2015  and 2016, and proposes annual
increases in the required volume of biomass-based diesel for 2015, 2016, and 2017. The volumes
used to determine the proposed percentage standards are shown in Table 1.

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                                     Table 1
        Volumes Used to Determine the Proposed Percentage Standards3

Cellulosic biofuel
Biomass-based diesel
Advanced biofuel
Total renewable fuels
2014
33 mill gal
1.63 bill gal
2.68 bill gal
15.93 bill gal
2015
106 mill gal
1.70 bill gal
2.90 bill gal
16.30 bill gal
2016
206 mill gal
1.80 bill gal
3.40 bill gal
17.40 bill gal
2017
n/a
1.90 bill gal
n/a
n/a
  aAll volumes are ethanol-equivalent, except for biomass-based diesel which is actual.
These proposed volumes would allow volumes of conventional (non-advanced) renewable fuel
of up to 13.25, 13.40, and 14.00 billion gallons to be used to satisfy the total renewable fuel re-
quirements for years 2014, 2015, and 2016, respectively. The charts below demonstrate that the
proposed standards would represent significant growth over recent historical levels.
            Proposed Growth in
       Total Renewable Fuel Standard
   Proposed Growth in
Advanced Biofuel Standard
                                   Proposed Growth in
                              Biomass Based Diesel Standard
                                                  Proposed

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Four separate percentage standards are required under the RFS program, corresponding to the
four separate volume requirements shown in Table 1. The percentage standards represent the ra-
tio of renewable fuel volume to non'renewable gasoline and diesel volume. Thus, in 2016 about
10% of all transportation fuel used would be from renewable sources. The proposed standards are
shown in Table 2.

                                       Table 2
                          Proposed Percentage Standards

Cellulosic biofuel
Biomass-based diesel
Advanced biofuel
Total renewable fuels
2014
0.019%
1.42%
1.52%
9.02%
2015
0.059%
1.41%
1.61%
9.04%
2016
0.114%
1.49%
1.88%
9.63%
Once the proposal is published in the Federal Register, it will be open for public comment until
July 27, 2015.
For More Information
For more information on this proposal, please visit the RFS website at:
          www.epa.gov/otaq/fuels/renewablefuels

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