What is the Renewable Fuel Credit Program?
There are presently two bills pending in the U.S. Congress that contain similar provisions for the Renewable Fuel Credit program. The Renewable Fuel Credit program would be administered by the EPA, which would determine the renewable fuel obligations for the following calendar year based on projections by EIA in the fall of each year. Renewable fuel credits are tradable only in the same calendar year in S. 650; however, S. 606 allows credit trading for up to 2 calendar years if the EPA determines that there are excessive seasonal variations in the use of renewable fuel, again based on an annual study by EIA. Neither bill specifies a detailed credit trading mechanism, but both require the EPA to promulgate an RFP that would also regulate credit trading within a year of the enactment of the bill. Our analysis implicitly reflects the ethanol production and consumption behavior that would be stimulated by a national RFP credit trading system. The model does not force ethanol to be blended
