Under the current law, ethanol and biodiesel producers receive a Renewable Identification Number (RIN) for each gallon of renewable fuel they produce, which is transferred to refiners who purchase and blend the renewable fuel into gasoline and diesel. These compliance costs are then passed on to drivers in the retail price of fuel.
Created by Congress in 2007, the Renewable Fuel Standard (RFS) is a program that requires American refiners to blend renewable fuels – primarily ethanol – into the fuel that consumers across the country use to get where they want to go by fueling their cars and trucks.
There are several big problems with the RFS, including what’s called the ‘ethanol blendwall.” Most American cars and light trucks have been built to run on a fuel blend of 90% gasoline and 10% ethanol. Using more ethanol will void most vehicle warranties provided by all major automotive manufacturers.
What is the Renewable Fuels Standard?
Congress first created the Renewable Fuels Standard – or RFS – in 2005, passing additional legislation in 2007 that significantly expanded the program to what it is now, over a decade later.
Currently, the RFS requires American refiners to blend renewable fuels – primarily ethanol derived from corn – into gasoline and diesel.
Renewable Fuel producers receive a Renewable Identification Number (RIN) for each gallon of renewable fuel they produce. This RIN is transferred to refiners who purchase and blend the renewable fuel into gasoline and diesel.
At the time, Congress established an escalating amount of ethanol that would be blended into fuel, ultimately requiring refiners to blend 36 billion gallons of ethanol into transportation fuel by 2022. It also gave “credits” – or RINs – for corn-based ethanol and added “credits” for the use of technologically advanced cellulosic ethanol made from things like switchgrass or food waste.
While the RFS has been in effect for over a decade, markets and industries have changed, and it is now time to re-evaluate and reform the current RFS.
GET INVOLVED – TELL CONGRESS TO FIX THE RFS
Why Does Congress Need to Act?
Congressional leaders made two key assumptions when they expanded the RFS in 2007:
- That fuel demand would increase every year; and
- that advanced biofuels (such as ethanol from food waste) would be technologically feasible.
Unfortunately, each of those assumptions proved to be incorrect, and ultimately leading to major issues with the cost and management of the RFS.
These challenges are impacting families, farmers and our nation’s refining infrastructure.
With some many people and different industries on the line, the only real, thoughtful way to fix the RFS is to reform it. And to do this, we need Congress to act.
If done right, the RFS could provide sustainable benefits for families, farmers, refiners and overall energy diversity. We’ve learned a lot in the 10 years since Congress first passed the RFS, and not all of it is working. Now we have an opportunity to reform and fix what’s broken, and that is the best solution of all.
It’s time for Congress to fix the RFS.