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Wednesday, September 1, 2010

Waiver Authority Under the Renewable Fuel Standard (RFS)

Brent D. Yacobucci
Specialist in Energy and Environmental Policy

Transportation fuels are required by federal law to contain a minimum amount of renewable fuel each year. This renewable fuel standard (RFS), established by the Energy Policy Act of 2005 (EPAct, P.L. 109-58) and amended by the Energy Independence and Security Act of 2007 (EISA, P.L. 110-140), requires that 12.95 billion gallons of renewable fuels be blended into gasoline and other transportation fuels in 2010. Most of this mandate will be met using corn-based ethanol. However, within the overall RFS there are secondary mandates for the use of cellulosic biofuels, biomass-based diesel fuels, and other advanced biofuels. Questions have been raised over whether there is enough feedstock supply and production capacity to meet these carveouts. 

The Environmental Protection Agency (EPA) has the authority to waive the RFS requirements, in whole or in part, if certain conditions outlined in the law are present. In 2008 the governor of Texas requested a waiver of the RFS because of high grain prices, although that waiver request was denied because EPA determined that the RFS requirements alone did not "severely harm the economy of a State, a region, or the United States," a standard required by the statute. In February 2010, as part of a final rulemaking implementing the RFS as expanded by EISA, EPA waived most of the 2010 cellulosic biofuel carveout—EISA set the mandate at 100 million gallons but EPA is only requiring 6.5 million gallons, more than 90% less than scheduled by EISA. EPA cited a lack of current and expected production capacity, driven largely by a lack of investment in commercial-scale refineries. Further, for 2011, EPA has proposed a cellulosic mandate of between 5.0 and 17.1 million gallons, well below the 250 million gallons scheduled in EISA. EPA plans to choose a single value when the rule is finalized in November. 

This report provides a brief overview of the RFS program and discusses the process and criteria for EPA to approve a waiver petition.

Date of Report: August 20, 2010
Number of Pages: 8
Order Number: RS22870
Price: $19.95

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