April 11, 2007

U.S. EPA establishes Renewable Fuel Standard program

Washington, D.C. – The U.S. Environmental Protection Agency (EPA) has established the country’s first comprehensive Renewable Fuel Standard (RFS) program, which increases the use of alternative fuels. The program is the first step in the government’s “20 in 10” goal of reducing gasoline usage by 20 per cent in ten years.

Authorized by the Energy Policy Act of 2005, the RFS program requires that the equivalent of at least 7.5 billion gallons of renewable fuel be blended into motor vehicle fuel sold in the U.S. by 2012. The program is estimated to cut petroleum use by up to 3.9 billion gallons and cut annual greenhouse gas emissions by up to 13.1 million metric tons by 2012, the equivalent of preventing the emissions of 2.3 million cars.

The program promotes the use of fuels such as ethanol and biodiesel, which are largely produced from American crops; it also establishes special incentives for producing and using fuels produced from cellulosic biomass, such as switchgrass and wood chips. It requires major American refiners, blenders and importers to use a minimum volume of renewable fuel each year between 2007 and 2012, with the standard determined as a percentage of the total volume of fuel a company produces and imports, and which will increase every year. For 2007, 4.02 per cent of all fuel sold or dispensed to U.S. motorists, roughly 4.7 billion gallons, will have to come from renewable sources.

The RFS program is based on a trading system that provides a flexible means for industry to comply with the annual standard, by allowing renewable fuels to be used where they are most economical; various renewable fuels can be used to meet the program’s requirements, and while a minimum amount is established, producers and blenders can use more renewable fuel if they choose.

The 20 in 10 plan also calls for reforming and modernizing CAFE standards to increase the fuel economy of cars, which will reduce projected annual gasoline use by up to 8.5 billion gallons.

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