House ag committee grills EPA Administrator Regan on 2023 RFS volumes

U.S. EPA Administrator Michael Regan

Clean Fuels Alliance America thanked bipartisan members of the House Committee on Agriculture April 19 for asking U.S. EPA Administrator Michael Regan why proposed 2023, 2024 and 2025 Renewable Fuel Standard volumes for biomass-based diesel and advanced volumes do not match the industry’s current production.

According to EPA’s data, the U.S. market for biodiesel, renewable diesel and sustainable aviation fuel (SAF) exceeded 3.6 billion gallons in 2022.

EPA’s proposed volumes for these fuels over the next three years do not reach 3 billion gallons per year.

“We appreciate EPA Administrator Regan’s commitment to ensuring advanced biofuels have a role in the low-carbon economy and that rural communities have a seat at the table from an environmental and economic standpoint,” said Kurt Kovarik, vice president of federal affairs for Clean Fuels. “As Reps. David Scott and Mike Bost pointed out, the proposed 2023, 2024 and 2025 RFS volumes do not put advanced biofuels and biomass-based diesel on the promised upward trajectory. We look forward to working with EPA to ensure that the final rule reflects the investment and growth of biodiesel, renewable diesel and SAF.”

The full recording of the hearing is available on the House Committee on Agriculture’s website. Excerpts from the hearing are below:

From Rep. David Scott, R-Georgia, the committee’s ranking Democrat:

Scott: Administrator Regan, I recently joined a bipartisan group of my House colleagues in sending you a letter, which I would ask that we enter into the record now. And this letter was in regard to the renewable volume obligations proposed by EPA for 2023 to 2025. As noted in the letter, the Energy Information Administration has projected a doubling of renewable diesel capacity by the year 2025. With EPA’s proposed targets for biomass-based diesel accounting for less than 10 percent of the volume increase estimated by EIA, how do you account for this divide? And can you commit to us setting blending targets that will support the expected growth and promise of these industries?

Regan: Well, thank you for the question, congressman, and let me just say that in 2022 we set the highest volumes ever in EPA’s history. So we’re proud of that and what we plan to do is continue that trajectory. As you know we proposed a rule and we’re in that proposal phase and there aren’t too many things that I can comment [on] during this time of comment but what I can say is that 2023, 2024, and 2025 will continue that positive trajectory. We’re taking in a lot of comments on the role of biodiesel. We’re taking a lot of comments in on these amounts. And so we’re taking a very close look at those, and I can assure you we’ve met with a number of stakeholders who have offered us a lot of new data and we believe that will be reflected in the final rule.

Scott: Thank you for that. Now last week, you announced emission standards for new cars. And that announcement led to concerns from the biofuels industry and our farmers in regard to the administration’s view on the role biofuels have been playing and can continue to play in reducing emissions and powering our cars and trucks. So, tell us, what would you say to our farmers and our domestic biofuels industry—the role you see biofuels playing in the future?

Regan: Well, I think we see a significant role. It’s called walking and chewing gum at the same time. I think that when you look at the policies of this EPA, and the investments that we’re making in biofuels and advanced biofuels, just by the last RVO volumes we set and the ones we’re anticipating setting, and then the partnership that I have with Secretary Vilsack and Secretary Buttigieg as we look at the role of biofuels with aviation fuels, we see a tremendous market for biofuels that is complimentary to the EV fuels future. And so we think that we can do both—we see a balance here. And in both cases, we’re trying to follow the markets, follow technology, and follow the science, as well.

From Rep. Mike Bost, R-Illinois:

Bost: My colleagues and I, though, also sent a letter last week expressing our concern over the EPA’s proposal of the renewable volume obligation for advanced biofuels and, in particular, biomass diesel fuel. Now the proposed RVO undercuts the biobased diesel growth to just about 190 million gallons over three years. And when in 2022 alone the RVO increased biomass diesel by 330 million gallons, what data did the EPA use to reach the 190 million gallons over three years? And will the final rule increase blending targets for biomass-based diesels to reflect that industry's growth that’s going to occur?

Regan: I appreciate that question and I have met with the biomass diesel folks to kind of talk through that. We were using the number that USDA uses and I’ve sort of recognized that they are also looking at some infrastructure that they believe will be in place over the next five to 10 years that will be able to facilitate a larger volume. So what I can say there, because we’re in a proposal phase, is that we’ve engaged and taken the comments and we’re taking a look at how we come out with our final in terms of that number.

Bost: And I’m running short on time but I need to understand—do you ever take into consideration what it may do to the markets in the future?

Regan: I’m sorry?

Bost: What it’ll do to the markets—because we deal off of markets. We do our production based on—I’m cutting it short but I’ll get that to you and see if we could get an answer.

Regan: I’d love to follow up on that.

From Rep. Brad Finstad, R-Minnesota:

Finstad: The biodiesel and renewable diesel industry provides a substantial economic benefit for my state’s soybean growers. Without the RFS market, soybean prices could drop by about 13 percent. Meanwhile, the EPA has proposed volumes for advanced biofuels and biomass-based diesel for the next three years that are below what the industry is producing today. So, are you aware that there’s been over $6 billion in announced investment to increase oilseed-crush capacity, and this is now in jeopardy as a result of the EPA’s RFS proposal?

Regan: I have met with the biodiesel, biofuels groups, and they’ve made us aware of some information. They’ve also given us some information through the comment period. And listen, we’re taking that information under consideration. I can’t say more because this is a comment period, but I can tell you that we’ve heard these communities and we’re governing ourselves accordingly.

Finstad: I appreciate the fact that you’re listening. So I really do, and just, my advice is please continue to do that. And if we have the opportunity to meet offline, I would love to talk to you about [how important this is to] farmers in farm country and in southern Minnesota.

From Rep. Angie Craig, D-Minnesota:

Craig: The U.S. is currently transitioning to a cleaner, greener economy to ensure that we preserve a healthy planet for our children to grow up in. That being said, I am concerned about the EPA’s approach with regard to this clean-energy transition. In the past few months, despite previous support, your policies have alienated the renewable fuels sector. The EPA’s proposed RVOs shifted away from investments in the Higher Blends Infrastructure Incentive Program. Biomass-based diesel supports over 75,000 jobs, contributes over 23 billion annually to the American economy, and reduces greenhouse-gas emissions by approximately 74 percent when compared to petroleum diesel. These RVO standards overlook those advancements. Furthermore, the EPA’s proposed new car pollution rules released last Wednesday was another hit to the renewable fuels sector. These rules also overlook the strides biofuels have made in decreasing greenhouse-gas emissions and further limit the biofuels market. You referenced in your testimony that you have a strong desire to work closely with the farming community to promote practical, science-based policies that protect the environment and support the U.S. ag system. I’m concerned that these proposals are not practical for the agricultural community. Not only do these recent EPA actions fail to consider the existing capabilities of the renewable fuels market and its potential for growth, but they undervalue the American farmers who rely on the same biofuels market the U.S. government has been incentivizing for the last decade.