Two years later, the Energy Independence and  Security Act of 2007 (EISA) increased and expanded the statutory target  volumes for renewable fuels and extended the ramp-up period through  2022. Biomass-based diesel: Advanced biomass-based diesel must have  life-cycle greenhouse gas emissions at least 50 percent lower than  traditional petroleum-based diesel fuels. EPA administers the RFS in consultation with DOE and USDA. EPA’s  responsibilities for implementing the RFS include setting annual volume  requirements. The RFS Is Expected to Fall Short of Its Goals Because of Limited Production of Advanced Biofuels and Reliance on Conventional Corn- Starch Ethanol

As we found in our November 2016 report, it is unlikely that the goals of  the RFS—reduce greenhouse gas emissions and expand the nation’s  renewable fuels sector—will be met as envisioned because there is  limited production of advanced biofuels and limited potential for expanded  production by 2022. Advanced biofuels achieve greater greenhouse gas  reductions than conventional biofuels, although the latter account for most  of the biofuel blended into domestic transportation fuels under the RFS. As a result, the RFS is unlikely to achieve greenhouse gas emissions  reductions as envisioned. For example, the cellulosic biofuel blended into  the domestic transportation fuel supply in 2015 was less than 5 percent of  the statutory target of 3 billion gallons. Partly as a result of low production  of advanced biofuels, EPA has reduced the RFS targets for such fuels  through waivers in each of the last 4 years. According to experts we  interviewed, the shortfall of advanced biofuels is the result of high production costs, and the investments in further R&D required to make  these fuels more cost-competitive with petroleum-based fuels, even in the  longer run, are unlikely in the current investment climate. Several experts raised concerns about the extent to which the RFS is  achieving its goal for reducing greenhouse gas emissions, given that  most biofuel blended under the RFS is corn-starch ethanol. Experts Suggested Multiple Federal Actions That Could Improve the RFS Framework by Incrementally Encouraging Investment in Advanced Biofuels

As we reported in November 2016, while advanced biofuels are not likely  to be produced in sufficient quantities to meet the statutory targets,  experts identified actions that they suggested could improve the existing  RFS framework by incrementally increasing investment in advanced  biofuels, which may lead to greater volumes of these fuels being  produced and used in the longer term. This is a work of the U.S. government and is not subject to copyright protection in the  United States.
Why GAO Did This Study

Since 2006 the RFS has required that transportation fuels—typically gasoline and diesel—sold in the United States be blended with increasing volumes of biofuels to meet environmental and energy goals. Annual targets for the volumes of biofuels to be blended are set by statute. EPA is responsible for adjusting the statutory targets through 2022 to reflect expected U.S. industry production levels, among other factors, and for setting volume targets after 2022. Biofuels included in the RFS are either conventional (primarily corn-starch ethanol) or advanced biofuels (e.g., cellulosic ethanol and biomass-based diesel). Advanced biofuels emit fewer greenhouse gases than petroleum-based fuels and corn-starch ethanol.
In November 2016, GAO issued two reports on the RFS. This testimony is based on those two reports: GAO-17-94 and GAO-17-108 . It provides information on whether the RFS is expected to meet its production and other targets, as well as expert views on any federal actions that could improve the RFS framework, among other things.
For the reports on which this testimony is based, GAO analyzed legal requirements and EPA data. In addition, GAO worked with the National Academy of Sciences to convene a meeting of experts from industry, academia, and research organizations in May 2016. GAO also contracted with the National Academy of Sciences for a list of experts on issues related to the RFS. Further information on how GAO conducted its work is contained in the reports.

What GAO Found

It is unlikely that the goals of the Renewable Fuel Standard (RFS)—to reduce greenhouse gas emissions and expand the nation's renewable fuels sector while reducing reliance on imported oil—will be met as envisioned because there is limited production of advanced biofuels and limited potential for expanded production by 2022. Advanced biofuels, such as cellulosic ethanol and biomass-based diesel, achieve greater greenhouse gas reductions than conventional biofuels (primarily corn-starch ethanol), but the latter account for most of the biofuel blended into domestic transportation fuels under the RFS. As a result, the RFS is unlikely to achieve the targeted level of greenhouse gas emissions reductions. For example, the cellulosic biofuel blended into the transportation fuel supply in 2015 was less than 5 percent of the statutory target of 3 billion gallons. Partly as a result of low production of advanced biofuels, the Environmental Protection Agency (EPA), which administers the RFS in consultation with other agencies, has reduced the RFS targets for such fuels through waivers in each of the last 4 years (see figure). According to experts GAO interviewed, the shortfall of advanced biofuels is due to high production costs. The investments required to make these fuels more cost-competitive with petroleum-based fuels, even in the longer run, are unlikely in the current investment climate, according to experts.