Regulation of Fuels and Fuel Additives: Renewable Fuel Standard ...

For purposes of this preamble, the various gasoline products (as described above)
that we are proposing to include in the volume of gasoline used to determine the
renewable fuel obligation are collectively called “gasoline.”
Generally, ethanol and other renewable fuels would typically be used in gasoline,
increasing the volume of the entire gasoline blend. We are proposing to exclude the
volume of renewable fuels contained in gasoline from the volume of gasoline used to
determine the renewable fuels obligation. In implementing the Act’s renewable fuels
requirement, our primary goal is to design a program that is simple, flexible and
enforceable. If the program were to include renewable fuels in the volume of gasoline
used to determine the renewable fuel obligation, then every blender that blends ethanol
downstream from the refinery or importer would be subject to the renewable fuel
obligation for the volume of ethanol that they blend. There are currently approximately
1,200 such ethanol blenders. Of these blenders, only those who blend ethanol into RBOB
are regulated parties under current fuels regulations. Designating all of these ethanol
blenders as obligated parties under the RFS program would greatly expand the number of
regulated parties and increase the complexity of the RFS program beyond that which is
necessary to carry out the renewable fuels mandate under the Act.
The Act provides that the renewable fuel obligation shall be “applicable to
refiners, blenders, and importers, as appropriate.” 23 For the reasons discussed above, we
believe it is appropriate to exclude downstream renewable fuel blenders from the group
of parties subject to the renewable fuel obligation, and to exclude renewable fuels from
the volume of gasoline used to determine the renewable fuel obligation. This exclusion
would apply to any renewable fuels that are blended into gasoline at a refinery, contained
in imported gasoline, or added at a downstream blending facility. Thus, for example, any
ethanol added to RBOB or CBOB downstream from the refinery or importer would be
excluded from the volume of gasoline used to determine the obligation. Any nonrenewable
fuel added downstream, however, would be included in the volume of gasoline
used to determine the obligation. This approach has no impact on the total volume of
renewable fuels required, merely on the number of obligated parties. We invite comment
on the proposal to exclude renewable fuels in the volume of gasoline subject to the
renewable fuels obligation. As discussed earlier, in a similar manner this volume of
renewable fuel would also be excluded from the calculation performed each year by EPA
to determine the applicable percentage.
23 CAA Section 211(o)(3)(B), as added by Section 1501(a) of the Energy Policy Act of 2005.
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