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You may have heard the phrase “RFS-2” in the news recently. You may know that this is the “Renewable Fuels Standard” which started July 1, 2010. For many, however, beyond this point the details get lost in the government lingo and the 549 page document that details the regulation.

Hence, here is Blue Sun’s 60-second RFS overview and what it means to your fuel.

The RFS-2 is managed by the EPA and is the program to enact the directives of the Energy Policy Act of 2005. The standard requires that a specified percentage of all transportation fuels be alternative fuels.

What it does:
•    Establishes required volumes of alternative fuels (11.1B gallons total in 2009).

•    Defines 4 sub-types of alternative fuel (renewable fuel, advanced biofuel, biomass-based diesel, cellulosic biofuel) and requires these fuels to reduce Greenhouse Gas (GHG) by specific levels to qualify (20%, 50%, 50% and 60% respectively for the four fuel types listed above. 2005 baseline.)
•    Expands regulation to cover diesel and off-road fuel (in addition to on-road gasoline) when calculating base for required renewable fuel volumes.
•    The rule applies to “obligated parties” which are refiners, blenders and importers of transportation fuel, and specifies the percentage of their fuel production which must be alternative fuel.

What it means for your fuel:
•    More alternative fuel options will begin to be available for vehicles. These options are likely to require no modification of a vehicle’s engine to use the fuel. Blue Sun will be a part of developing these fuels.
•    Biodiesel is likely to be added to most retail diesel fuels. Similar to the approach with ethanol, biodiesel will likely be added in low percentages to every gallon of diesel.
•    Blue Sun FUSION fuel will remain a major alternative fuel for diesel vehicles for a long time. Only the feedstock that is used to make the fuel may change.

Blue Sun FUSION can help you meet RFS-2 requirements. If you want to run a true “renewable fuel” Blue Sun FUSION is your best option. FUSION reduces emissions while maintaining the performance you expect from your vehicle.

Blue Sun’s biodiesel fuels help obligated parties meet the “Biomass-based diesel” portion of the regulation. The EPA estimates that 700 million gallons of biodiesel will be used in 2010 to meet the requirements of the RFS-2.

In this federal regulation biodiesel is credited with a 50% greenhouse gas (GHG) reduction, qualifying soy-based biodiesel as a “biomass-based diesel”, one of the higher-rated categories in the RFS-2.
In addition to biomass-based diesel with a 50% GHG reduction, the other levels are advanced biofuel (50% GHG reduction), cellulosic biofuel (60%) and renewable fuel (20%).

The RFS-2 requires obligated parties, primarily oil refiners and importers, to produce a certain percentage of their total fuel production as these alternative fuels. In 2010 the total requirement is 1.15 billion gallons for biomass-based diesel, 0.95B for advanced biofuel, 0.0065B for cellulosic biofuel and 12.95B gallons for the renewable fuel category.

This means the biodiesel industry can potentially provide the lion’s share of a 1.15 billion gallon market. To put that in perspective, US consumption of biodiesel peaked in 2007 with 358 million gallons consumed (EIA, Short-Term Energy Outlook Supplement – April 2009). Fuel producers, the alternative fuel industry and investors are all up to their elbows in the 1000-page regulation, working to understand the new opportunities for alternative fuels. Blue Sun Energy is one company prepared for considerable growth.

“Between our connections in the fuels market, our reputation for quality in production and the quality control of our fuel in the supply chain, Blue Sun is in a great spot to move forward given this news from the EPA,” says Steve Bond of Blue Sun Energy.

Low Carbon Fuels Standard

Another potential boost to the biodiesel industry is the upcoming Low Carbon Fuel Standard (LCFS.) California’s late-April ‘09 adoption of the LCFS solidified new ways of looking at transportation fuels regulation. This is important because the LCFS is seen as a forerunner to U.S. policy and will soon affect every driver’s use of fuel, including you. Additionally, several other states have pledged to follow the LCFS in some way. The LCFS becomes active in 2011. Blue Sun will be there to help you meet LCFS standards.

Carbon Intensity Values
The LCFS requires a 0.25% reduction in 2011 climbing to a 10% reduction in carbon intensity by 2020 (2010 baseline). To help obligated parties (producers, blenders, importers) meet these goals a carbon intensity look up table has been created. Major fuel types and their carbon intensities are detailed in this lookup table within the LCFS regulation.

Ethanol from corn was hit particularly hard by these changes and is now comparable or even greater in carbon intensity (from 77 to 104gCO2e/MJ) than that of gasoline (~96gCO2e/MJ). California may have the power to hold the line on this determination. Nationally, however, the corn lobby and senators from corn-producing states are strong enough to potentially defeat ILUC (Indirect Land Use Change) provisions in the national policy. Blue Sun FUSION is in a much better place, with very much lower carbon intensity at 26.9 gCO2e/MJ.

What this means is that Blue Sun FUSION continues to be a major alternative fuel to help you meet coming mandates. Whether you’re directly regulated or an end user of fuel, Blue Sun’s fuels will be a solution for low-emissions transportation fuel.