US EPA issues long-delayed biofuel mandates for 2020, 2021, 2022

New biofuel blending mandates issued by the US Environmental Protection Agency June 3 track largely with the agency's December proposal to retroactively ease blending requirements for US refiners in 2020 and 2021 ahead of raising the amount of renewable fuel refiners will have to mix with gasoline and diesel in 2022.

The long-awaited final rule tied to EPA's Renewable Fuel Standard program maintains cuts proposed in December to the 2020 renewable volume obligations (RVOs) set in a 2019 final rule, while giving a slight boost to the overall blending mandate for 2021 and slight dip for the 2022 mandate from what was proposed. It also denies 69 pending economic hardship exemptions sought by small refineries.

Specifically, the new rule cuts the 2020 biofuel mandate to 17.13 billion gallons from 20.09 billion gallons and requires refiners to blend 18.84 billion gallons of renewable fuel in 2021 and 20.63 billion gallons in 2022. The December proposal had called for 18.52 billion gallons to be blended in 2021 and 20.77 billion gallons in 2022.

The EPA also lowered the 2020 advanced biofuel mandate to 4.63 billion gallons from 5.09 billion gallons, in line with its proposal.

The agency set the 2021 advanced biofuel mandate at 5.05 billion gallons, down from the 5.20 billion gallons proposed but up 9% from the revised 2020 mandate. It put the 2022 advanced biofuel mandate at 5.63 billion gallons, also down from the 5.77 billion gallons proposed but up 11.5% from the 2021 figure.

Conventional ethanol blending under the final rule drops to 12.5 billion gallons in 2020 and 13.79 billion gallons in 2021, but returns to 15 billion gallons in 2022.

The EPA annually reviews biofuel blending targets set by Congress and generally issues a rule setting RVOs in line with market conditions, but the Trump administration left office without issuing such a rule.

The EPA under President Joe Biden extended compliance deadlines for the 2019 and 2020 RVOs and amended its regulations governing future RFS compliance and reporting deadlines to accommodate potential delays in the promulgation of the annual standards without the need for a rulemaking to alter compliance dates.

The delays in setting the new blending targets prompted ethanol group Growth Energy to sue the agency. That litigation was settled in April, as the EPA agreed to a consent decree holding it to a June 3 deadline for finalizing the new RVOs.