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The Renewable Fuel Standard 101

September 17, 2014

What Is The Renewable Fuel Standard? 

The Renewable Fuel Standard, or RFS, was signed into law in 2005 by President George W. Bush as part of the Energy Policy Act. The RFS was later expanded under the Energy and Independence and Security Act of 2007. The law requires a certain amount of biofuels to be blended into gasoline each year in increasing amounts annually. These biofuels produce less greenhouse gases as they are burned and, therefore, are better for the environment than burning regular fuel. Use of the biofuels allows us less independence on oil, which was one of the goals for passing the RFS. The RFS also encourages investment and expansion into renewable fuel sources. The RFS is administered by the EPA.

What are the RFS Requirements? 
Originally, the RFS set the amount of biofuels for the years 2006 to 2012. By 2012, 7.5 billion gallons of biofuels were required to be blended with gasoline. The expansions to the RFS that took place in 2007 now require that by the year 2022, we will be blending 36 billion gallons of renewable fuel annually!

How Does the RFS Work? 

According to American Progress:

To ensure RFS compliance, gasoline and diesel-fuel refiners must annually purchase a set amount of renewable fuels. The refiners are required to submit renewable fuel credits to the Environmental Protection Agency, or EPA, to show that they have covered their annual obligations. These credits, known as Renewable Identification Numbers, or RINs, are generated by the production of biofuels—one RIN is generated for each gallon of fuel in the RFS program—and can be bought and sold by refiners, as well as banked for future use.

The renewable fuels used also must meet certain requirements, including a certain percentage in reduction of greenhouse gas emissions. 
What is the Impact? 

Since the RFS was passed in 2005, the United States has become the number 1 producer of corn ethanol in the world. Corn ethanol is by far the favorite biofuel. Other types of biofuels have been slower to expand, which was hampered by the economic recession in 2008. However, the EPA predicts it will become more widely available as the amount of biofuel required each year continues to rise. 
By 2022, the EPA estimates biofuels will replace 13.6 gallons of gasoline and diesel consumption! That would reduce greenhouse gas emissions by 138 million metric tons. In (slightly) more relatable terms, that would be like removing 27 million vehicles from the road!

Doesn’t the RFS Increase Food Costs? 

Slightly. By 2022, corn prices are expected to be 8.2% higher than usual based on the RFS. Although corn prices soared in 2012 due to the drought, they have since come down significantly. The higher prices of corn has increased the price of animal feed and, therefore, an increase in total groceries. Nonetheless, the estimated annual food cost is only expected to increase by $10 per person annually by 2022.
How is the RFS Working Now? 
Each year the EPA sets forth the requirements for meeting the RFS. Unfortunately, they have still not rolled out the 2013 requirements, delaying them until September 30, 2014. The EPA is also struggling to come up with the 2014 standards, which they insist should be released before making manufacturers comply with the 2013 standards. One set back is the sheer volume of public comments on the RFS, which was about 300,000; no doubt farmers had something to do with that!
To learn more, check out the Renewable Fuels Association’s online webinars.
Sources: EPA, American Progress, The Hill  
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Filed Under: Uncategorized Tagged With: corn, education, environment, EPA, ethanol, farm economy, RFS

Hi, I'm Amanda. My family farms corn and soybeans in Southwest Michigan. I'm an attorney and I'm passionate about agriculture!

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