Diesel Emission Reduction Programs
• DERA National RFP
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Opened April 30, closes June 10
Emphasis on non-attainment and NATA areas
Roughly $1.3 million for Region 4, $300k to $1 million
SEDC priorities now in regional priorities
• DERA Tribal RFP
– Opened May 14, closes July 15
– $1 million
• Ports Initiative
• High priority topic at the national, regional level
• SEDC 10thAnnual Partners meeting
– August 17-19
1
Overview: U.S. Renewable
Fuels Program
Region 4 Air Directors Meeting
Spring, 2015
Dale Aspy
2
History
Goals: Energy Security, Reduce mobile GHG emissions,
rural development
• Energy Policy Act of 2005 – Established the first RFS
Program Standards
• Energy Independence and security act of 2007 modified the
clean Air act and significantly changed the program
– National Standard but with 4 categories of renewable fuels
– Significantly increased volumes of
– renewable fuel – to 36 billion gallons
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2022 Full Implementation
Expanded to on and off-road gasoline and diesel
Explicit definitions for renewable fuels to qualify
Inclusion of specific types of waivers
Legislation allows renewable fuels used in Home Heating Oil and
Jet Fuel to count towards RFS2 program
3
2007 EISA RFS2 Program - Key Aspects
• Established Specific Volume Standards for Renewable Fuel Use in the
Transportation Sector – Gasoline and Diesel; On and Off-Road
• Establishes four categories of renewable fuels - each With individual volume
standards:
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cellulosic biofuel
biomass-based diesel
advanced biofuel
total renewable fuel
• Set specific qualification requirements for renewable fuels and feedstocks
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Definitions for qualifying fuels & feedstocks Used to comply with the categories
• Specifically defines cellulosic, biomass-based diesel, etc.
Set minimum lifecycle GHG reduction thresholds for each category of renewable fuel
Applies restrictions on types of feedstocks that can be used to make renewable fuel, and
types of land that can be used to grow and harvest feedstocks
Established grandfathering allowances for renewable volumes from certain Existing
facilities
The RFS2 Regulations went into effect July 1, 2010.
4
Details of EISA Categories and Standards
•
Four Separate Standards
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Biomass-Based Diesel: Minimum of 1 Bgal by 2012 and beyond
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Cellulosic Biofuel: Minimum of 16 Bgal by 2022
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•
•
•
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E.g., Biodiesel, “renewable diesel” if fats and oils not co-processed with petroleum
Must meet a 50% lifecycle GHG reduction threshold
Renewable fuel produced from cellulose, hemicellulose, or lignin
E.g., cellulosic ethanol, BTL diesel, green gasoline, etc.
Must meet a 60% lifecycle GHG reduction threshold
Total Advanced Biofuel: Minimum of 21 Bgal by 2022 (Minimum of 4
billion additional
Total Advanced Biofuel
•
Essentially anything but corn starch ethanol
•
Includes cellulosic biofuels and biomass-based diesel
•
Must meet a 50% lifecycle GHG reduction threshold
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Total Renewable Biofuel: 36 Bgal by 2022 (Minimum of 15 Bgal additional)
•
Ethanol derived from corn starch – or any other qualifying renewable fuel
•
Must meet 20% lifecycle GHG reduction threshold - Only applies to fuel produced in
new facilities
Lifecycle GHG reduction comparisons are based on a 2005 petroleum baseline as mandated by
EISA.
5
NOTE: Existing biofuel facilities (domestic and foreign) are not required to meet GHG threshold
for conventional biofuel category – facilities are “Grandfathered.”
6
Simplified Process Flow
Chart
Approved Feedstock
Provider
Biorefinery : Renewable
Fuel Production and RIN
Generation with D Code
and Equivalence Value
Supply
Transportation
Obligated Parties: Refiner,
Blender, Importer -Blending Facility
7
Compliance
Who do the standards apply to and how are the
standards determined?
 Obligated Parties are Refiners, blenders or
importers of gasoline or diesel
 How are Obligations Determined?
◦ Obligations are calculated every year, based on EISA
volume standards and projections of gasoline and
diesel production for the coming year.
◦ A formula is used based on the above information to
calculate the Renewable Volume Obligations (RVO)
◦ The standards are converted into a percentage which
each obligated party must demonstrate compliance
with each year (Renewable Volume Obligation)
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Renewable Identification
Numbers (RINs).
• RINs generated on or after July 1, 2010 shall not
be generated as a 38-digit code, but shall be
identified by the information specified in
paragraphs (a) through (i) of this section and
introduced into EMTS as data elements during the
generation of RINs pursuant to §80.1452(b). For
RINs generated prior to July 1, 2010, each RIN is
a 38-digit code of the following form:
• KYYYYCCCCFFFFFBBBBBRRD
• SSSSSSSSEEEEEEEE
9
D codes
• (1) D has the value of 3 to denote fuel categorized as
cellulosic biofuel.
• (2) D has the value of 4 to denote fuel categorized as
biomass-based diesel.
• (3) D has the value of 5 to denote fuel categorized as
advanced biofuel.
• (4) D has the value of 6 to denote fuel categorized as
renewable fuel.
• (5) D has the value of 7 to denote fuel categorized as
cellulosic diesel.
10
“D” Production
Requirements
TABLE 1 TO §80.1426—APPLICABLE D CODES FOR EACH FUEL PATHWAY FOR USE IN GENERATING RINS
Fuel
type Feedstock
Production process requirements
DCode
A Ethanol Corn
starch
All of the following: Dry mill process, using natural gas, biomass, or biogas
for process energy and at least two advanced technologies from Table 2 to
this section
6
B Ethanol Corn
starch
All of the following: Dry mill process, using natural gas, biomass, or biogas
for process energy and at least one of the advanced technologies from
Table 2 to this section plus drying no more than 65% of the distillers grains
with solubles it markets annually
6
C Ethanol Corn
starch
All of the following: Dry mill process, using natural gas, biomass, or biogas
for process energy and drying no more than 50% of the distillers grains with
solubles it markets annually
6
D Ethanol Corn
starch
Wet mill process using biomass or biogas for process energy
6
T Renewable Compressed Natural Gas, Renewable Liquefied Natural Gas, Biogas from waste
and Renewable Electricity
digesters
Any 5
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Compliance Basics of RFS2
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RINs are the currency of the RFS2 program – used for compliance
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RINS are generated by renewable fuel producer
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Obligated parties must obtain enough RINS in each category to comply
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Trade, buy, produce, bank
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Types of Fuels are assigned a D Code – determined by EISA definition,
restrictions, GHG evaluation, energy calculation
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RINs follow product volume
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RIN separation from volume may only be performed by an obligated party
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RIN credits have a two year life –year generated, plus one year
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Program continues to be supplemented by recordkeeping and attest
requirements
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Compliance Basics of RFS2
Standard
RINs That Can Be Used To Meet
Each Standard In RFS2
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•
Obligation
Allowable D codes
Cellulosic biofuel
RVOCB
3 and 7*
Biomass-based diesel
RVOBBD
4 and 7*
Advanced biofuel
RVOAB
3, 4, 5, and 7
Renewable fuel
RVORF
3, 4, 5, 6, and 7*
A renewable fuel may have different pathways and different equivalency values
• Example:
• Ethanol from Corn = D Code of 6 (Renewable Fuel)
Ethanol from Sugarcane = D code of 5 (Advanced Renewable)
RIN Equivalency Values (Examples)
• Ethanol is Baseline Value - all other renewable fuels are compared with ethanol)
• Ethanol: 1.0
• Biodiesel: 1.5; 1.6
• Butanol: 1.3
• Non-ester renewable diesel: 1.7
:
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Overview: Compliance System
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EPA Moderated Transaction System (EMTS):
– A closed, EPA-managed system that provides:
1) a mechanism for screening and
2) a means for tracking RIN credits
– Screening process checks that the
information provided by the RIN generator is
consistent with an existing registration
Renewable
Production /
Import
EPA
Screening
Fail
Pass
– RIN tracking process is similar to a banking
system.
• Accounts are assigned to registered users.
• Transactions are conducted through EMTS
which enforces business rules – e.g. a
seller must have a sufficient account
balance for a buyer to receive their credits.
RIN
Generator
Registration
Marketers
Blenders
Traders
Obligated
Parties
S
ell
Producers
B
u
y
B
u
y
S Other RIN
ell Owners
B
u
y
S
ell
Importers
■ = Attached RIN
■ = Separated RIN
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Setting the EISA RFS2 Standards Each Year
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EPA Sets EISA Standards Every Year
– Based on projected gasoline / diesel projections
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Formula used per regulations to determine the 4 obligations in terms of a
percentage of production and EISA volume standards applied for each
category
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Proposal – Setting Following Year RFS2 Volume Standards
– EISA Volumes converted into percent of gasoline and diesel production expected
for following year
– Standards that apply to refiners, importers, gasoline blenders
– Cellulosic standard set based on EIA projections, our market assessment and
info through notice and comment
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Biomass-Based Diesel Standared EPA must determine the applicable volume of
biomass-based diesel at least 14 months prior to the year in which the volume
will be required.
– Beginning in 2013
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Final Standards --- November 30th by Law
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Setting the standards-Key Facts
and Goals
 2014 brought a number of new issues that EPA must consider in setting the
standards
 A key issue is the ethanol “blendwall” – challenges associated with supplying
more ethanol to the market than can be provided through blending up to 10%
ethanol in gasoline (E10) and can be consumed in other blends or forms
 In 2014 – for the first time, EPA is proposed adjustments to the total renewable
fuel and advanced biofuel standards to address these market issues
 EPA provided a strong indication that this would likely be the case when the Final
2013 RFS Rule was issued last August
 EPA’s intention was to put the RFS program on a manageable trajectory that will
support continued growth in renewable fuels
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1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
MMGals
bgals
Ethanol Blendwall
Annual Gasoline Consumption
140
135
130
125
120
115
110
105
100
Ethanol Production
16000
14000
12000
10000
8000
6000
4000
2000
0
Year
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Proposal for 2014
 The 2014 rulemaking proposed volume requirements for the RFS program outlined
a potential path forward for 2014 and beyond
 The proposal, issued November 2013, was the starting point in seeking input from
the public
 EPA held a public hearing December 2013
 Comment period closed at the end of February 2014
 The proposal offered a number of approaches and ranges of volumes in setting the
2014 standards
 Stakeholders weighed with well over 300,000 comments
 2014 Standards still haven’t been finalized.
 Agency announced last December intention to take action on 2014, 2015 and
2016 this year.
 First Action likely in Spring with intention on getting back on schedule for
setting current and future annual standards.
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Consent Decree
•
The American Petroleum Institute (API) and the American Fuel and Petrochemical Manufacturers (AFPM)
filed suit over the delays in the Agency issuing the annual standards by the Statutory required dates
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April 10: EPA announced a proposed settlement with API and AFPM over deadlines for issuing The
standards
– EPA must seek public comment on the terms of the settlement for 30 days before deciding whether
to proceed with the settlement and seek entry of the consent decree
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Under the proposed consent decree EPA would issue final annual volume standards for both 2014 and
2015
– EPA must propose volume requirements for 2015 by June 1, 2015 and;
– finalize 2014 and 2015 Standards (and resolve pending waiver petition for 2014) by November 30,
2015.
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While not required Under the Proposed Consent decree, EPA also announced the volume standards rule
will include the following elements in addition to the requirements of the consent decree:
– re-propose volume requirements for 2014 that reflect the volumes of renewable fuel that were
actually used in 2014.
– finalize standards for 2016 in same action
– EPA will also propose and finalize biomass-based diesel volume requirement for 2017
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