US set to maintain biofuel quotas

29 November 2018 Week 47 Issue 636

The Trump administration appears to be siding with farmers in a fight between two powerful lobby groups.

The government is expected not to change its quotas for how much biofuels must be blended into the US fuel supply during 2019.

Oil refiners will be required to blend in 15 billion gallons of biofuels, such as ethanol made from maize, the same as the 2018 quota.

The Environmental Protection Agency (EPA) us expected to publish its biofuel targets for 2019 on December 1.

The amount is not a surprise. In June, the EPA had proposed that 15 billion gallons, or a total of 19.88 billion gallons including advanced biofuels such as cellulosic. The EPA is also expected to propose a 15.7% increase in the 2020 target for biodiesel.

The petroleum industry maintains that the blending of biofuel into petrol is too costly and is unnecessary.

If refiners do not blend in enough biofuels, they must buy credits known as Renewable Identification Numbers or RINs, a multi-billion dollar market beset by dropping prices.

The EPA administers the controversial Renewable Fuel Standard (RFS), adopted in 2005 to slash petrol imports and bolster the agriculture sector.

Meanwhile, in another move that should please the agricultural lobby, the Trump administration will temporarily freeze the awarding of exemptions from biofuel blending to small oil refineries which say that to do so would cause them financial hardship.

While the waiver programme is on hold, the method of evaluating applications will be reviewed.

Biofuel advocates have accused the EPA of illegally awarding waivers to too many small refineries. Trump’s EPA has approximately tripled the number of waivers issued compared with during the previous presidency.

Fifteen refineries have so far applied for exemptions this year, and seven were still being considered for 2017. “There’s no good reason multibillion-dollar oil refineries making record profits should receive so-called ‘hardship’ waivers exempting them from following the law,” said a senior Republican Senator, Chuck Grassley of Iowa, said in a statement. Iowa is the heart of the corn-growing Midwest. “Under the last EPA chief, the waiver program became a cookie jar open to every well-connected refinery owner, and we’re seeing the results across rural America with biofuel plants closing their doors or idling production,” said Brooke Coleman, of the Advanced Biofuels Business Council.

Edited by

Richard Lockhart

Editor

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