The Renewable Fuel Standard 3.0?: Moving Forward with the Federal Biofuel Mandate

Abstract

Increased reliance on renewable energy technologies remains the best approach to mitigate the environmental and social problems associated with the unsustainable use of finite fossil fuels for our energy needs. The Renewable Fuel Standard (“RFS” or “Standard”) exists as a pioneering pillar in the realm of federal incentives for renewable energy technologies, particularly biofuels. By mandating the commercialization of socially beneficial biofuels, it: (1) improves the environment by reducing climate change inducing greenhouse gas emissions from the transportation sector; (2) increases U.S. energy security by reducing petroleum imports from hostile foreign regions; and (3) serves as a driver for much needed economic development. Moreover, it does this through an exceptionally elegant regulatory regime, which imposes its costs on the petroleum industry and, as such, has very little impact on the federal budget. But a political storm is beginning to brew over the continued implementation and existence of the RFS. Petroleum-related interests, who vehemently oppose the RFS for obvious reasons, continue to outspend the lobbying efforts of stakeholders who support it and the food industry, which continues to cling to the increasingly empirically refuted notion that biofuels have an enormous impact on food prices, are using the 2012 draught as a rallying cry for waiving the RFS’s requirements. Congress is beginning to head the call and has considered an increasing number of Bills seeking to either modify or repeal the Standard.

In this Article, we provide a thorough analysis of all issues facing the continued implementation and existence of the RFS. We first set out background information on biofuels in general and then provide a detailed overview of the enactment, creation, and implementation of the RFS’s regulatory regime. Second, we present a political economy analysis of altering the RFS, where we detail the preferences, critiques, and relative political bargaining power of all affected stakeholders. Next, we detail and comment on all legislative attempts to modify or repeal the RFS that Congress has considered in its current term. Finally, we provide our justified recommendations, which include legislative and administrative reform proposals for moving forward with the Standard. Specifically, we recommend that the biofuel categories under the RFS be expanded to include socially beneficial biomass sourcing at volumetric target levels consistent with current production and blending realities.

Keywords: Biofuel, Renewable Fuel Standard, RFS, RFS2, Renewable Energy, Policy