U.S. Legislative Issues

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EPA Finalizes Higher Renewable Fuel Levels Under RFS

On June 10, 2015, the U.S. Environmental Protection Agency (EPA) published the proposed volume requirements and associated percentage standards that would apply under the Renewable Fuel Standard (RFS) program in calendar years 2014, 2015, and 2016 for cellulosic biofuel, biomass-based diesel, advanced biofuel, and total renewable fuel, and the proposed volume requirement for biomass-based diesel for 2017. Created by Congress in 2005, and enhanced by legislation in 2007, the RFS governs the amount of ethanol that must be blended by refiners each year into the gasoline supply.

On November 30, the EPA finalized the long-awaited renewable volume obligations under the RFS, approving slightly higher renewable fuel levels than previously proposed in June, but stopping short of mandating the volume of biofuels once envisioned for 2016 as set by Congress in the Energy Independence and Security Act of 2007. The final rule, which was developed with public input, establishes blending levels of 16.28 billion gallons for 2014, 16.93 billion gallons for 2015, and 18.11 billion gallons for 2016.

Unsurprisingly, reactions have been mixed. The National Biodiesel Board applauded the Obama Administration and the EPA upon release of the final requirements.  Under the final rule, biodiesel volumes would grow to 1.9 billion gallons in 2016 and 2 billion gallons in 2017.  This is made up of mostly of biodiesel but also includes renewable diesel.

The announcement was met with dismay by many corn growers, who count on robust annual biofuel targets to drive demand for their crops. Monte Shaw, Executive Director of the Iowa Renewable Fuels Association, called the EPA’s announcement "a gut punch for consumers and farmers."

Oil industry leaders, however, praised the EPA for using its waiver authority to lower ethanol mandates but said the agency didn’t go far enough. The final targets for 2015 and 2016 are beyond the American Petroleum Institute’s (API) request to cap the total ethanol mandate at 9.7 percent of gasoline demand, which would provide a buffer below the 10 percent blend accepted in all cars and trucks to accommodate sales of ethanol-free gasoline. "EPA’s final rule relies on unrealistic increases in sales of higher ethanol fuel blends despite the fact that most cars cannot use them," said API President Jack Gerard.



In efforts to reduce greenhouse gas emissions, California has mandated cars have high-fuel efficiencies and encouraged drivers to buy hybrid and electric vehicles. California’s efforts have proven so successful, however, that it is now struggling to finance road maintenance due to sharp declines in revenue generated by the state gas tax. In September 2014, the Legislature passed a bill directing California to conduct a pilot program to study the feasibility of a road charge as a replacement for the gas tax to pay for road maintenance and repairs.

California is seeking 5,000 volunteers to participate in its California Road Charge Program, a nine-month vehicle-miles-traveled pilot program scheduled to start in July 2016. The Program is being administered by the California State Transportation Agency and the California Transportation Commission. The pilot program is seeking the following participating vehicles:

Commercial Light Duty

• 100 vehicles in Northern California
• 50 vehicles in Central California
• 175 vehicles in Southern California

Medium- and Heavy-Duty Commercial Trucks

• 50 vehicles  and nine industry segments

o Large integrated fleet
o Large private fleet
o Owner/operator – intermodal
o Owner/operator – over the road
o Agriculture – exporters
o Agriculture – seasonal operators
o Agriculture – private fleet
o Construction
o Energy  

NAFA members seeking additional information about participating in the program are encouraged to contact NAFA’s U.S. Legislative Counsel, Pat O’Connor, at poconnor@nafa.org.



In January 2014, the Federal Motor Carrier Safety Administration (FMCSA) issued a proposed rule in response to a requirement contained in the current transportation law, known as MAP-21, to "ensure ... an operator of a commercial motor vehicle is not coerced by a motor carrier, shipper, receiver or transportation intermediary to operate a commercial vehicle in violation of a regulation." The law’s directive also required the FMCSA to weigh whether coercion of drivers is a concern when developing the rule. "By forcing drivers to operate mechanically unsafe commercial motor vehicles or drive beyond their allowed hours, coercion increases the risk of crashes," the FMCSA stated.  

On November 30, 2015, the FMCSA issued its final rule prohibiting carriers, shippers and brokers from coercing truck drivers to violate hours-of-service (HOS) and other safety regulations, effective Jan. 29, 2016. The Final Rule addresses three key areas concerning driver coercion: procedures for commercial truck and bus drivers to report incidents of coercion to the FMCSA, steps the agency could take when responding to such allegations, and penalties that may be imposed on entities found to have coerced drivers.  

MAP-21 also included a provision requiring the FMCSA to develop a rule mandating the use of electronic logging devices (ELDs). An ELD is used to electronically record a driver’s Record of Duty Status and is meant to replace the paper logbook some drivers currently use to record their compliance with HOS requirements. Once enacted, fleets will have two years to implement certified ELDs to record HOS. Fleets already equipped with electronic logging technology will have until late 2019 to ensure compliance with the rule.

The most recent update of the Department of Transportation’s significant rulemakings announced that the ELD rule would be published by November 30, but it has yet to be released.

 

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