Renewable Fuel Standard (RFS) ProgramThe national RFS Program was developed to increase the volume of renewable fuel that is blended into 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 increased and expanded this standard. By 2022, 36 billion gallons of renewable fuel must be used per year. A certain percentage of the renewable fuel blended into transportation fuels must be cellulosic biofuel, biomass-based diesel, and advanced biofuel. Cellulosic biofuel is defined as any renewable fuel derived from cellulose, hemicellulose, or lignin that achieves a 60% greenhouse gas (GHG) emissions reduction. Biomass-based diesel is defined as a renewable transportation fuel, transportation fuel additive, heating oil, or jet fuel that meets the definition of either biodiesel or non-ester renewable diesel, and achieves a 50% GHG emissions reduction. If intended for use in a motor vehicle, the fuel must also be registered with EPA as a motor vehicle fuel or fuel additive. Renewable fuel that is co-processed with petroleum is not considered biomass-based diesel. Advanced biofuel is defined as any renewable fuel, other than ethanol derived from corn, that 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 United States, 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.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 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 EPA's Office of Transportation and Air Quality on a quarterly and annual basis.
For more information, see the RFS Program website.