EPA expands definition of heating oil under RFS

The U.S. EPA has published a final rule to expand the definition of heating oil under the renewable fuel standard (RFS). According to the agency, the amendment expands the scope of renewable fuels that can be used to comply with the RFS by adding an additional category of compliant fuel produced from qualifying biomass that used to generate heat to warm buildings or other facilities. The new category of fuels is referred to as “fuel oils.” Fuel used to generate process heat, power or other functions is not included in the new category of heating oil.

The original definition of heating oil included any No. 1 or No. 2 non-petroleum diesel blend that is sold for use in furnaces, boilers and similar applications and contains at 80 percent mono-alkyl esters of long chain fatty acids derived from vegetable oils or animal fats. According to the EPA, it has received several requests to expand that definition since it was finalized in 2010 to include additional fuel oils that are produced from qualifying renewable biomass but do not meet that regulatory definition.

The EPA revised the definition in parallel direct final and proposed rules in October 2012, but withdrew the final rule two months later as a result of public comments. The current rulemaking has finalized the proposed rule.

The new category of fuels includes two types of fuel oils not included in the original definition of heating oil, including fuel oils that to not meet the original definition but are actually used to heat homes and fuel oils that are used to heat facilities other than homes to control ambient climate for human comfort.

In the rulemaking, the EPA notes there are currently several fuel pathways under the RFS that list heating oil as a fuel type with various types of feedstock and production processed used, including those that qualify the resulting fuel as cellulosic, advanced or biomass-based diesel. The pathways also include several types of distillate products, such as diesel fuel, jet fuel and heating oil.

The EPA also specifies that the main difference between the original definition of heating oil and the new category added in the expanded definition established by this rulemaking is that the new category includes heavier types of fuel oil with larger molecules. No physical specifications are set for the new category, beyond the requirement that the fuel must be liquid at 60 degrees Fahrenheit and 1 atmosphere of pressure contain no more than 2.5 percent mass solids.

The final rule also establishes additional registration, reporting, product transfer documentation and recordkeeping requirements. To ensure RINs are only generated for fuels used to heat homes and buildings, the EPA requires that the producer or importer have adequate documentation to demonstrate the fuel oil volume for which RINs were generated is used to provide that type of heat. The new reporting requirements do not apply to fuels meeting the original RFS definition of heating oil.

The Advanced Biofuels Association has spoken out to applaud the EPA for expanding regulatory definition of heating oil. “This newly expanded definition will help sustain growing renewable fuel production, particularly of advanced or cellulosic biofuels, in the heating oil market,” said Michael McAdams, ABFA president. “This rule will allow actual gallons of advanced and cellulosic heating oil to be delivered this year to the market. The change also underscores EPA’s continued leadership administering the renewable fuel sandard (RFS) program.”

The rule become effective 60 days following its publication in the Federal Register.