BIO Comment on EPA's Proposed Denial of Petitions for Rulemaking to Change the RFS Point of Obligation
BIO is supportive of EPA’s proposal. In BIO’s view, granting the petitions in question would add unnecessary regulatory complexity and uncertainty to the Renewable Fuel Standard ("RFS") program, jeopardize U.S. economic and job growth, and would fail to further the statutory requirements and goals that Congress directed EPA to enforce and pursue when Congress created the program.
Because the oil industry is highly consolidated and vertically integrated, enforcing the RFS program at the right point in the supply chain is critical to ensure that key market players have the incentive to facilitate the goals of the program. Moving the point of obligation downstream would remove that imperative for refiners and inject uncertainty into the program, undermining the ability of market actors to plan for growth in renewable fuels use as mandated by Congress. Further, committing to one regulatory regime only to change the rules midstream hampers the RFS program’s goal -- mandated by Congress in the law that created the program -- of accelerating the commercialization of advanced and cellulosic biofuels. Changing the point of obligation would achieve just the opposite of that goal. It would increase program complexity, impose a set of new administrative and compliance costs and risks that would adversely affect a significant range of new entities, and undermine investor confidence in the broader renewable fuels industry just as cellulosic and other advanced biofuels are coming online2. Also, as EPA rightly noted in its draft analysis of the Proposed Denial, market data does not justify changing the RFS point of obligation.