Posted on November 14, 2015, 14:23
Max Pyziur and Lucian Pugliaresi on Technical Constraints and Cost Risks from the Renewable Fuel Standard
Under US law, increased volumes of biofuels must be blended into gasoline and diesel fuels. A variety of factors, including future demand for transportation fuels, falling crude oil prices and technological constraints, are all providing new challenges to successfully implementing the biofuel mandate.
This EPRINC assessment demonstrates that the RFS (Renewable Fuel Standard) requirements create considerable long-term costs, risks, and uncertainties to fuel producers, and are likely to raise transportation fuel costs substantially.
EPRINC estimates that under current law fuel costs could increase by an additional $0.15 to $0.25 per gallon in 2022, with considerable potential for price spikes well above these estimates. These volumetric biofuel requirements will add an additional $20 to $35 billion in annual costs to motorists. EPA has authority under the law to reduce the volumetric requirements giving it a major role in setting prices for transportation fuels in the US market.
The full report is available at the following link: