US proposes slight rise in biofuel mandate

28 June 2018 Week 25 Issue 614

The Trump administration is proposing to increase slightly the proportion of ethanol and other biofuels in the US’s fuel supply.

Oil refiners must blend ethanol into the fuel that they sell according to a policy called the Renewable Fuels Standard (RFS).

The Environmental Protection Agency (EPA) announced on June 26 that the biofuel mandate for 2019 would be 19.88 billion gallons (90.4 billion litres), up 3.1% compared with the 2018 level. The increase is in line with expectations.

The RFS, started by Republican President George W Bush, is controversial. Big Corn – ethanol is typically made from maize grown in Midwestern states – backs the mandate, whereas Big Oil sees it as expensive and unnecessary.

Oil-producing states also form part of Trump’s political base. Trump has struggled to reconcile the interests of the two lobbies.

The 19.88 billion gallons (90.4 billion litres) would consist of 15 billion gallons (69.2 billion litres) of ethanol – a level that has stayed the same – with the balance consisting of advanced renewable fuels such as cellulosic biofuel or biodiesel. The 2019 biodiesel level was proposed at 2.1 billion gallons (9.5 billion litres).

“I’ve travelled to numerous states and heard first-hand about the importance of the RFS to farmers and local communities across the country,” said EPA chief Scott Pruitt in a statement.

“Issuing the proposed rule on time meets Congress’s statutory deadlines, which the previous administration failed to do, and provides regulatory certainty to all impacted stakeholders.”

Still, biofuel advocates charge the EPA with illegally awarding waivers to too many small refineries that have made a case for financial hardship.  Trump’s EPA has approximately tripled the number of waivers issued.

According to Renewable Fuels Association President Bob Dinneen, such waivers have destroyed 1.6 billion gallons (7.2 billion litres) of biofuel demand in one year.

Monte Shaw, executive director of the Iowa Renewable Fuels Association, told Bloomberg that as long as the EPA was “granting small refinery exemptions left and right, the ethanol number isn’t worth the paper it’s written on.”

Administration officials had reportedly considered requiring larger refiners to blend in an additional 1.5 billion gallons (6.8 billion litres) of biofuels to make up for the quotas, but the proposal was dropped.

Edited by

Richard Lockhart


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