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EPA to Announce E15, Fuel Economy Rules

Proposed rules with implications on fuel demand set to be finalized in spring 2019

WASHINGTON -- The U.S. Environmental Protection Agency (EPA) plans to adopt final rules for fuel economy and E15 this coming spring.

The agency announced the dates for final action as part of the Office of Management and Budget’s (OMB) fall 2018 statements of regulatory priorities.

First up is a new rule covering the Corporate Average Fuel Economy (CAFE) target for passenger cars and light-duty trucks for 2020 and beyond, which the EPA plans to adopt by March 2019. The EPA under the Trump administration has proposed the Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule, which would freeze the fuel-efficiency target for 2021 to 2026 model-year vehicles at the 2020 target of 43.7 miles per gallon. The SAFE proposal would increase oil demand by 500,000 barrels per day, or 2% to 3% of daily consumption, according to the EPA. The agency says the SAFE rule would also cut lifetime vehicle ownership costs by an average of $2,340, which would lead to faster fleet turnover to newer, safer vehicles, which would save up to 1,000 lives per year.

A comment period on the SAFE rule and alternative actions ends Oct. 23. 

E15 waiver

By May 2019, the EPA plans to adopt a final rule that would provide E15 with a waiver of summertime Reid vapor pressure (RVP) requirements. In October, the Trump administration directed the EPA to begin rulemaking to provide the 15% ethanol blend with the waiver, which would allow the ethanol blend’s sale year-round. Currently, fuel retailers in most markets can only sell E15 from June 1 to Sept. 15 to drivers of flex-fuel vehicles. 

When the White House announced its plans on E15 year-round sales, opponents charged that Congress—not the EPA—had the legal authority to do so, and pointed to past EPA statements in the Obama administration to that effect. The American Fuel & Petrochemical Manufacturers (AFPM) suggested it would pursue legal action against the EPA's RVP waiver move. But Andrew Wheeler, the acting director of the EPA, pushed back against this criticism, telling reporters, “We do have the authority to move forward on E15,” Reuters reported. “And I hope the oil industry would join us in helping make (U.S. biofuel policy) function better for the American public, rather than taking it to court.”

The EPA also plans to take steps to reform the Renewable Identification Number (RIN) market under the Renewable Fuel Standard (RFS). Obligated parties under the RFS, such as refiners, use RINs as credits to demonstrate compliance to annual biofuel blending targets. Many large retail chains earn RINs to sell as they blend biofuels. Some opponents of the RFS have argued that the RIN market lacks transparency and is open to abuse by speculators, which has driven up prices from time to time, cutting into refiners’ profits.

To increase transparency, the Trump administration and the EPA have proposed a few different reforms to the RIN system, including allowing only obligated parties to purchase separated RINs, announcing when an individual entity has amassed RINs beyond certain limits, limiting now long nonobligated parties under the RFS can keep RINs, and retiring RINs in real time. 

Photograph: Shutterstock


 

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