United States (Federal) Fuel Production Standards

U.S. EPA Raises the Renewable Fuels Standard for 2008

In response to the Energy Independence and Security Act of 2007 (EISA), signed into law by President Bush in December 2007, the U.S. Environmental Protection Agency (EPA) has subsequently the increased the 2008 Renewable Fuels Standard (RFS) to 7.76% in order to meet the new requirement that all transportation fuels sold contain a minimum of 9 billion gallons of renewable fuel in 2008, as set by the EISA. To determine these volumes, EPA calculates the percentage-based standard annually, which applies to refiners, importers, and non-oxygenate blenders of gasoline. The new RFS supersedes the 2008 RFS that EPA published in November 2007, prior to the enactment of the EISA.

The EISA requires an increase in the overall volume of renewable fuels that must be blended into transportation fuels each year, increasing to 36 billion gallons per year by 2022. In addition, beginning in 2013, a certain percentage of the renewable fuels must be advanced and/or cellulosic based biofuels and biomass-based diesel. For more information on these requirements and the RFS program, visit the EPA's RFS Program Web site as well as the RFS information on the Federal Incentives & Laws Web site.

Energy Independence and Security Act of 2007 Signed Into Law

President Bush signed the Energy Independence and Security Act (EISA) of 2007 (House Resolution 6), designed to improve vehicle fuel economy and help reduce U.S. dependence on oil. EISA aims to increase the supply of alternative fuel sources by setting a mandatory Renewable Fuel Standard (RFS) requiring transportation fuel sold in the U.S. to contain a minimum of 36 billion gallons of renewable fuels by 2022, including advanced and cellulosic biofuels and biomass-based diesel. In addition, the law requires the Corporate Average Fuel Economy (CAFE) standard to reach 35 miles per gallon by the year 2020. The EISA is projected to reduce energy consumption by 7% and greenhouse gas emissions by 9% by 2030. For a summary of the major provisions set forth by the legislation, visit the Energy Independence and Security Act of 2007 page of the Federal Incentives & Laws Web site. The complete legislation can be viewed on the Library of Congress Web site.

Renewable Fuel Standard (RFS) Program

The national RFS Program was developed to increase the volume of renewable fuel that is blended into gasoline and other transportation fuels. As required by the Energy Policy Act of 2005, the U.S. Environmental Protection Agency (EPA) finalized RFS Program regulations, effective September 1, 2007. The Energy Independence and Security Act of 2007, signed into law in December 2007, increased and expanded this standard. In 2008, 9 billion gallons of renewable fuel must be used, increasing to 36 billion gallons per year by 2022. Beginning in 2013, a certain percentage of the renewable fuels must be advanced and/or cellulosic based biofuels and biomass-based diesel, pending final rulemaking by EPA. Cellulosic biofuel is defined as any renewable fuel derived from cellulose, hemicellulose, or lignin, and achieves a 60% greenhouse gas (GHG) emissions reduction. Advanced biofuel is defined as any renewable fuel, other than ethanol derived from corn, derived from renewable biomass, and achieves a 50% GHG emissions reduction.

Each year, EPA will determine the Renewable Volume Obligation (RVO) for parties required to participate in the RFS Program. This standard is calculated as a percentage, by dividing the amount of renewable fuel (gallons) required by the RFS to be blended into gasoline for a given year by the amount of gasoline/transportation fuel expected to be used during that year. Any party that produces gasoline for use in the U.S., including refiners, importers, and blenders (other than oxygenate blenders), is considered an obligated party under the RFS Program. Parties that do not produce, import, or market fuels within the 48 contiguous states are exempt from the renewable fuel tracking program. Small refineries and refiners are also exempt from the program until 2011. A small refinery is defined as one that processes fewer than 75,000 barrels of crude oil per day, has a total crude capacity of less than 150,000 barrels per day, and employs fewer than 1,500 employees company-wide. All obligated parties are expected to meet their RVO beginning in 2007.

To facilitate and track compliance with the RFS, a producer or importer of renewable fuel must generate Renewable Identification Numbers (RINs) to represent renewable fuels produced or imported by the entity on or after September 1, 2007, assigned by gallon or batch. Assigned RINs are transferred when ownership of a batch of fuel occurs, but not when fuel only changes custody. A trading program is in place to allow obligated parties to comply with the annual RVO requirements through the purchase of RINs. Obligated parties must register with the EPA in order to participate in the trading program. For each calendar year, an obligated party must demonstrate that it has sufficient RINs to cover its RVO. RINs may only be used for compliance purposes in the calendar year they are generated or the following year. Obligated parties must report their ownership of RINs to the EPA's Office of Transportation and Air Quality on a quarterly and annual basis.

(Reference 42 U.S. Code 7545(o) and 40 CFR 80.1100-80.1167)

Point of Contact

U.S. Environmental Protection Agency
Phone (202) 272-0167
http://www.epa.gov