MEMA has learned that the Environmental Protection Agency (EPA) is considering an interim rulemaking that would offer ground rules for a flexible renewable fuel credit trading program. This consideration comes following the enactment of new energy legislation on Aug. 8 which establishes a renewable fuels mandate set to begin Monday, Jan. 1, 2006.

According to sources, the EPA is weighing the rulemaking to implement a requirement in the new energy law for refiners, blenders and importers to use increasing amounts of renewable fuels such as ethanol over the next several years, reaching 7.5 billion gallons by 2012.

The trading program is aimed at allowing individual companies to comply with a renewables mandate either by using renewable fuel or by purchasing credits from other companies in a position to sell them. Beginning in 2005 and ever year thereafter, the energy law also requires the EPA to publish a notice in the Federal Register outlining the “renewable fuels obligation” for the coming year for oil industry entities.

In addition, the energy bill requires the EPA to draft regulations to implement the renewable mandates, including efforts to establish new fuels rules and diesel engine emissions initiatives. The law also requires revised test procedures that are the basis for fuel economy labels on automobiles and creates new authority to scrutinize underground storage tanks.

Although the approved energy bill gives the EPA one year to issue regulations to implement the renewables mandate, sources are reporting that the EPA is likely to issue an interim regulation much sooner.