A Primer on Requirements for the Use of Renewable Fuels in the U.S. Transportation Sector

U.S. federal law has encouraged the use the renewable fuels in the U.S. transportation sector since the 1970’s. Under President Carter, Congress enacted several renewable-energy programs, including targeted subsidies to promote the use of ethanol in transportations fuels. Between 1981 and 1984, a “Solar and Energy Conservation Bank” was established which was authorized to spend $3 billion to provide loans for solar energy and conservation investments. These appropriations were cut by later Congresses.

The renewable fuels programs, which were largely dominated by a series of federal financial incentives since the 1980’s were modified in 2005 to include specific volumetric mandates for the use of renewable fuels, largely supplied by ethanol from corn. The Energy Policy Act of 2005 (EPACT05) included financial incentives and regulatory provisions to promote a broad range of domestic fuels, including nuclear power, conventional fossil fuels, renewable fuels, and greater energy efficiency. Among the requirements for alternative transportation fuels were volumetric mandates that required so-called obligated parties, such as refiners and importers, to phase-in renewable fuel volumes over 7 years, beginning with 4 billion gallons by 2006 and ending at 7.5 billion gallons in 2012. These mandates in EPACT05, also known as Renewable Fuel Standard 1 (RFS1), were implemented through a rule making process promulgated by the Environmental Protection Agency Read More >>>