EPA Finalizes Regulations for a 

Renewable Fuel Standard (RFS) 

Program for 2007 and Beyond 

The U.S. Environmental Protection Agency (EPA) has established a national renewable fuel program (the Renewable Fuel Standard 

Program, or RFS program). The program is designed to encourage the 

blending of renewable fuels into our nation’s motor vehicle fuel. This 

rule establishes the annual renewable fuel standards, responsibilities 

of refiners and other fuel producers, a trading system and other compliance mechanisms, and recordkeeping and reporting requirements. 

In addition to the rule, EPA has published a Regulatory Impact Analysis (RIA), which contains analyses of the economic and environmental impacts of the expanded use of renewable fuels under this program. 

Background and Definitions 

The Energy Policy Act of 2005 amended the Clean Air Act to establish a Renewable 

Fuel Standard program. The U.S. Congress gave EPA the responsibility to coordinate 

with the U.S. Department of Energy, the U.S. Department of Agriculture, and 

stakeholders to design and implement this first-of-its-kind program. Three months 

after the Energy Policy Act of 2005 was signed, in December 2005, EPA set a 

statutory default standard that required that 2.78 percent of the gasoline sold or 

dispensed in calendar year 2006 be renewable fuel. Today’s rulemaking establishes a 

comprehensive RFS program for 2007 through 2012 and beyond. 

A renewable fuel is defined in the Energy Policy Act as a motor vehicle fuel that is 

produced from plant or animal products or wastes, as opposed to fossil fuel sources. 

Renewable fuels include ethanol, biodiesel and other motor vehicle fuels made from 

renewable sources. The program grants credit for both renewable fuels blended into 

conventional gasoline or diesel and those used in their neat (unblended) form as 

motor vehicle fuel. 

Any party that produces gasoline for use in the U.S., including refiners, importers, 

and blenders (other than oxygenate blenders), is considered an obligated party 

Office of Transportation and Air Quality 

EPA420-F-07-019 

April 2007 
under the RFS program. All obligated parties are expected to meet the renewable fuel standard 

beginning in 2007, with two important exceptions. First, small refiners and small refineries 

are exempt from meeting the renewable fuel requirements through 2010. Second, all gasoline 

producers located in Alaska, Hawaii, and noncontiguous U.S. territories are exempt from the 

RFS program indefinitely. These states and territories may opt into the program, however, and 

all of the refiners (except for small refiners and refineries), importers, and blenders located 

therein will then be subject to the renewable fuel standard. 

Due to the certainty provided to investors by the RFS program, production capacity for ethanol 

and other renewable fuels has significantly increased since the Energy Policy Act was signed, 

and the construction of new and expanded facilities is projected to continue. As a result, 

nationwide volumes of renewable fuel already greatly exceed the RFS requirements. By 2012, 

nationwide volumes are projected to reach over 11 billion gallons, compared to the 7.5 billion 

gallons required. 

Trading Program and Compliance Provisions 

The trading program allows obligated parties to comply with the annual renewable fuel standard 

through the purchase of renewable identification numbers (RINs) even if they cannot or do not 

wish to blend renewable fuels into gasoline. It also permits renewable fuels that are not blended 

into gasoline, such as biodiesel and biogas, to participate in the RFS program. This rule specifies 

who can generate RINs and under what conditions, how RINs may be transferred from one 

party to another, and the appropriate value of RINs generated from different types of renewable 

fuel. 

The RFS program specifies compliance and enforcement provisions, such as for facility 

registration, recordkeeping and reporting requirements, program enforcement, and various 

fuel tracking mechanisms. These provisions will enable the RIN trading program to function 

properly and will ensure an adequate foundation for Agency enforcement efforts. 

Impacts 

The RIA provides an analysis of the energy, emissions, air quality, and economic impacts of 

expanding the use of renewable fuels in comparison to a reference case of 4 billion gallons of 

renewable fuel use which represents 2004 conditions projected out to 2012. Depending on the 

volume of renewable fuel anticipated to be used in 2012, EPA estimates that this transition 

to renewable fuels will reduce petroleum consumption between 2.0 and 3.9 billion gallons or 

roughly 0.8 to 1.6 percent of the petroleum that would otherwise be used by the transportation 

sector. 

With regard to emissions impacts, carbon monoxide emissions from gasoline-powered vehicles 

and equipment will be reduced between 0.9 and 2.5 percent. Emissions of benzene (a mobile 

source air toxic) will be reduced between 1.8 and 4.0 percent. Further, the use of renewable fuel 

will reduce carbon dioxide equivalent greenhouse gas emissions between 8.0 and 13.1 million 

Office of Transportation and Air Quality 

Renewable Fuel Standard Program 
metric tons, about 0.4 to 0.6 percent of the anticipated greenhouse gas emissions from the 

transportation sector in the United States in 2012. 

At the same time, other vehicle emissions may increase as a result of greater renewable fuel 

use. Nationwide, EPA estimates an increase in total emissions of volatile organic compounds 

and nitrogen oxides (VOC + NOx) between 41,000 and 83,000 tons. However, the effects will 

vary significantly by region. Areas that already are using ethanol will experience little or no 

change in emissions or air quality. However, those areas that experience a substantial increase 

in ethanol may see an increase in VOC emissions between 4 and 5 percent and an increase in 

NOx emissions between 6 and 7 percent from gasoline powered vehicles and equipment. 

The societal cost to produce a gallon of gasoline is estimated to rise between 0.5 cent and 1.1 

cents, though the presence of the excise tax credit for ethanol will result in a net savings for 

fuel customers at the pump of 0.4 to 0.7 cents per gallon. Net U.S. farm income is estimated to 

increase by between $2.6 and $5.4 billion. 

For More Information 

For more information, please contact EPA’s Assessment and Standards Division information 

line at: 

U.S. Environmental Protection Agency


Office of Transportation and Air Quality


2000 Traverwood Drive


Ann Arbor, MI 48105


Voicemail: (734) 214-4636


 E-mail: asdinfo@epa.gov 

Office of Transportation and Air Quality 

Renewable Fuel Standard Program