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Looking back, 2023 was a year of mixed achievement, exemplified by the U.S. Environmental Protection Agency’s (EPA) final “set” ruling governing the RFS. For the first time in the history of the program, EPA set multi-year mandates from 2023 to 2025. Though the ruling recognized progress made by renewable diesel, biodiesel, and sustainable aviation fuel (SAF) producers in the Advanced, Biomass Based Diesel, and cellulosic categories, it missed an important opportunity to reflect our industry’s actual production capacity, particularly in the renewable diesel category. We will continue to encourage the EPA to reflect production realities in its next ruling.
Additionally, last year the administration released its proposed rules governing 2024 SAF tax credits, which included the use of the GREET model as a route to compliance. This update provides opportunities for more technologies to benefit from and participate in the production of SAF. These rules will be finalized by March 1, 2024. In the meantime, we will continue to engage federal agencies about IRA tax credits, especially the hydrogen credit.
We recognize the urgent challenge of reducing GHG emissions while providing reliable volumes of low carbon liquid transportation fuels to support the global economy. Many of our member companies have come out in support of the Paris Agreement and set goals to reach net zero. To achieve these goals, our larger members have committed significant capital to transition to a more climate friendly balance of technologies and broaden their investment portfolio.
This year, our members will continue this work by incorporating sustainability and carbon reductions throughout our value chain. This starts with regenerative agricultural practices to ensure that our feedstocks improve soil health and capture even greater amounts of carbon.
We will also seek to produce even greater quantities of low carbon advanced biofuels for use by American consumers. These fuels will help bridge the “electrification gap” and create opportunities for Americans to reduce their transportation-based carbon footprint now,
Finally, greater quantities of sustainable fuels may help stabilize consumer fuel prices after years of global geopolitical instability. Increased production of advanced biofuels will increase domestic supply and insulate America from oil price swings. As of last year, there were more than 40 active and proposed advanced biofuels facilities in the United States. This network of low carbon fuel producers is expected to have a robust impact on domestic fuel supply, with Lipow Oil Associates and the U.S. Energy Information Administration forecasting a strong increase in domestic renewable diesel and renewable aviation fuel production over the next two years.
As we look forward to 2024, America’s advanced biofuels producers are poised to capitalize upon momentum built over 2022 and 2023. We look forward to engaging policymakers, our members, and other partners to continue driving our shared effort to reduce America’s transportation-based carbon emissions forward.
