SENATE COMMITTEE ON ENVIRONMENT & PUBLIC WORKS
Hearing on the Renewable Fuel for Ocean-Going Vessels Act
For questions on the note below, please contact the Delta Strategy Group team.
On September 10, the Senate Committee on Environment and Public Works held a hearing to examine a discussion draft of the Wildfire Emissions Prevention Act, and S. 881, the Renewable Fuel for Ocean-Going Vessels Act, with the legislative text available here. Witnesses relevant to the Committee’s examination of S. 881 were:
- Kathy Metcalf, President Emeritus, Chamber of Shipping of America
- Nikita Pavlenko, Program Director, Fuels and Aviation, The International Council on Clean Transportation
Attached is a summary of the hearing prepared by Delta Strategy Group. It includes several high-level takeaways, followed by summaries of opening statements.
Key Takeaways
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Senator Ricketts (R-NE) emphasized the importance of the biofuels market in supporting U.S. farmers during difficult economic conditions, citing current suppressed global soybean and corn prices, as he warned that Brazil is projected to export eighty million tons more of soybeans than the U.S. He rejected claims that biofuels detract from the food supply, pointing to ample global soybean availability as he stressed the need to expand into new markets, such as maritime fuels, to drive demand for U.S. soybeans.
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Senator Ricketts outlined the reasoning behind the Renewable Fuel for Ocean-Going Vessels Act, stating it would clear a major roadblock by allowing U.S. biodiesel and renewable diesel producers to meet the needs of ocean-going vessels while preserving RFS credits, in addition to creating parity for maritime fuels with over-the-road and aviation fuels under the RFS. He highlighted that ocean-going vessels are excluded from the RFS despite ISO fuel standards now allowing up to 100 percent biodiesel or renewable diesel blends, enabling shipowners to decarbonize without retrofitting, and noting the adoption of renewable diesel at ports in Portland and Tacoma. He criticized how the RFS’s exclusion of ocean-going vessels is making the shipping industry miss out on a proven cleaner fuel, framing the Act as a win-win-win for benefit energy consumers, agricultural producers, and the environment.
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Senator Ricketts praised Environmental Protection Agency (EPA) Administrator Zeldin for setting timely, achievable Renewable Volume Obligations (RVOs) that reflect industry capacity, as he criticized the Biden administration for missing the mark on advanced biofuel volumes by setting too low targets and finalizing the RVOs below industry capacity. He emphasized that strong RVOs restore confidence and drive investment, particularly in crush capacity, as he submitted letters of support for the Act from industry stakeholders.
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Chairman Shelly Moore Capito (R-WV) cited how using biofuels to power ocean-going vessels is not currently a qualified use under the Renewable Fuel Standard (RFS), which may limit broader adoption. She asked where the industry’s efforts to reduce its carbon footprint are headed and whether maritime fuels will eventually be fully non-carbon-intensive or a blend. Metcalf responded that the goal is to reach zero emissions by 2050, consistent with the International Maritime Organization (IMO) target, and emphasized that the decarbonization of maritime transportation is a transition that takes time to achieve in an economical way. She stated that the industry needs to expand access to all fuels, and that biofuels are one being considered, in addition to her agreement that biofuels are a practical part of the fuel mix for ocean-going vessels.
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Pavlenko stated that the Renewable Fuel for Ocean-Going Vessels Act is expected to have a negligible impact on reducing greenhouse gas emissions, as he warned that including maritime fuels in the RFS could trigger higher volume targets in future rulemakings, compounding existing issues such as overreliance on imports and reduced compliance value for foreign feedstocks. He explained that the bill only allows maritime fuel producers to tap into the RFS, which is fundamentally a mandate for road sector biofuels, and does little to stimulate new demand.
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Pavlenko discussed how, without complementary outside policies, such as the IMO’s net-zero framework or a dedicated U.S. maritime fuel policy, selling fuels into the maritime market is not economically viable, especially given the loss of incentives from West Coast cap-and-trade and low carbon fuel standard (LCFS) programs. Citing the example of jet fuel being added to the RFS in 2014, but Sustainable Aviation Fuel (SAF) accounting for less than one percent of blending in aviation, he argued that the opt-in provision provides insufficient incentive to shift the market. He emphasized that renewable diesel is more lucrative in the road sector due to higher market prices and eligibility for LCFS and cap-and-trade credits, meaning producers are unlikely to divert supply to maritime fuels.
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Ranking Member Whitehouse (D-RI) asked why the maritime industry supports the IMO’s proposed carbon price for marine shipping emissions and related market-based mechanisms, with Pavlenko pointing to a global, consistent scheme as an avenue to ensure a level playing field across jurisdictions. When asked about the indirect land use change (ILUC), Pavlenko explained that it is a critical component of well-to-wake life cycle emissions for different fuels. He stated that new demand for crop-based biofuels can increase land use pressure and result in indirect market effects, requiring complex economic models to assess emissions impacts, as he noted how proper scoring matters.