August 11, 2021
If I had a nickel for every time I’ve heard “patience is a virtue,” I wouldn’t need to be employed. Personally, I think having patience is overrated as it is a virtue that I do not possess. While no one is really surprised by this, least of all my boss, many participants in the Renewable Fuel Standard (RFS) are running out of patience with EPA. As of the date of this article, EPA still has not released the Renewable Volume Obligations (RVOs) for the years 2021 and 2022.
As many participants in the Renewable Fuel Standard (RFS) are aware, EPA is extremely late in getting together RVOs for 2021, and 2022 isn’t looking so great either. In a normal year, EPA puts out proposed RVOs by late June, or early July. Proposed RVOs are then usually open to a comment period. EPA is then supposed to finalize the subsequent compliance year’s RVOs by November 30. So, 2021 RVOs should have been released by November 30 of 2020.
Didn’t I just write an article roughly two months ago about how EPA was rumored to release RVOs very soon? Yes, yes I did. However, in my defense, I wasn’t the only one that thought this way. Many voices within the renewable fuel and nonrenewable fuel industry made a convincing case that RVOs would be released in the month of July. The Office of Management and Budget (OMB) even listed the proposed rule to be released in July. It was initially thought that EPA would release RVOs after the Supreme Court ruled on the 10th Circuit case. Unfortunately, this never happened.
Now for the million-dollar question: If EPA knows when RVOs are supposed to be published, then why haven’t they done so? Well, actually, there’s a lot of reasons for that. First, the recent Supreme Court decision on the 10th Circuit case did not lend the industry the clarity it so desperately needs. While EPA may have been waiting on that decision, the decision itself didn’t really give the industry the clear-cut guidance it needed to be able to set realistic RVOs. Second, the Biden Administration is in the middle of promulgating a rule that would set post-2022 RFS regulations before the end of 2021. This is a time-consuming endeavor that should create a delicate balance between the needs of the industry and the wants of obligated parties. Finally, as the year 2022 approaches, EPA is considering the future of the RFS. As of right now, there is a proposed rule in the OMB, that would establish RVOs for the year 2023 and beyond. Again, not something any participant in the RFS wants to be taken lightly.
So, if EPA has this many things to consider, why haven’t they done so sooner? It’s not like they haven’t tried. While proposed RVOs for 2021 have been sitting at OMB since May of 2020, EPA has since faced a global pandemic, a looming Supreme Court battle, a change in presidential administrations and thus, a change in EPA administration, constant commentary from various participants in the RFS with regard to small refinery exemptions, and many other things that I’m certain I failed to mention. I’m sure you can imagine how difficult it would be to promulgate new RVOs when the entire world seems like it was set on fire. #dontplaywithmatches.
Now you’re just being an EPA apologist! Don’t you know that RFS participants are being held hostage by the lack of rules?! I am not unsympathetic to the participants who hold positions in the industry which require them to make business decisions on the basis of EPA rules and policy. #dramasforyourmama. It has been a tough couple of years for the renewable fuel industry and many RFS participants simply would like a little bit of clarity so that they can make accurate business decisions.
Will EPA issue those RVOs anytime soon? Great question. According to OMB, while the proposed rule for 2021 and, presumably, 2022 were supposed to be issued by now, the final rule is supposed to published by December. It is hard to imagine that EPA would allow the rule to be delayed much longer with a December final date looming ahead. At this point, however, anything is possible. #imagine.