Increasing ethanol mandate may pose compliance problems

25 April 2013 02:54  [Source: ICIS news]

CHICAGO (ICIS)--The US ethanol industry will probably meet the 2013 mandate established by the Renewable Fuel Standard (RFS) because of carried over Renewable Identification Numbers (RINs), but it may have problems complying with the 2014 mandate, a law professor said on Wednesday.

The RFS was created to establish a fuel volume mandate to boost ethanol, biodiesel and other renewable resources in the US. It requires the use of about 14bn gal in ethanol in 2013 and increases the mandate in 2014.

“Even in 2013, we’re able to meet the RFS mandates only because we have excess RINs of about 2.6bn that were generated last year,” University of Illinois law professor Jay Kesan said during a forum at the Bio International Convention.

RINs are credits issued to meet government mandates for blending ethanol into the gasoline pool. The excess RINs generated in 2012 can be carried over to 2013.

“For 2013, the EIA [US Energy Information Administration] predicts that 133.7bn gal of gasoline will be consumed in the US, Kesan said.

 “As this will likely be comprised of E10 blends, [or gasoline containing a maximum of 10% of ethanol], the E10 blend wall for 2013 will be roughly 13.37bn gal, which is 1.25bn gal less than what the RFS will require,” he said.

In order to meet the 2014 mandate, the US needs to increase gasoline consumption.

Other options include increasing consumption of E15, E85 or non-ethanol biofuels such as biodiesel or biobutanol.

Otherwise, the Environmental Protection Agency (EPA) needs to revise and reduce RFS mandates so that the US can meet those requirements in 2014 and beyond, Kesan said.

The Bio International Convention runs through 25 April.

By: Tracy Dang
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