July 5, 2019
The Trump administration on Friday advanced plans to modestly lift U.S. biofuel-blending targets, while dodging fights over how frequently to waive refineries from the quotas and how to offset those exemptions.
Under the Environmental Protection Agency’s proposal, refiners and importers would be required to use 20.04 billion gallons of renewable fuel in 2020, a 0.6% increase over the existing 2019 quota of 19.92 billion gallons. As much as 15 billion gallons of that could be fulfilled from conventional renewable fuels, such as corn-based ethanol, while refiners would have to turn to advanced biofuels for the remaining 5.04 billion gallons. The EPA is proposing to maintain a 2.43 billion gallon quota for biomass-based diesel in 2021, identical to the 2020 target.
The initiative aims to balance two competing interests -- oil and agriculture -- and by doing so could end up leaving both sides unsatisfied. Oil industry representatives say the Trump administration is bypassing opportunities to ratchet down requirements that displace petroleum-based gasoline. And renewable fuel advocates say the EPA is failing to account for agency decisions to waive refineries from billions of gallons worth of biofuel quotas.
Biofuel proponents argue the administration has handed out the waivers too freely, undermining domestic demand for their products and the corn and soybeans used to make them. After farmers and other biofuel allies took their case directly to Donald Trump, the president directed top administration officials to evaluate the government’s handling of the exemptions.
Although the administration is considering ways to offset the waived biofuel quotas -- and effectively redistribute them to non-exempted refineries -- the EPA didn’t make any such move in the proposal.
Independent oil refineries and their allies on Capitol Hill have pushed back on the administration review, warning that Agriculture Secretary Sonny Perdue‘s involvement in waiver decisions could violate federal law and vowing to block the confirmation of Agriculture Department nominees over the issue.
The oil industry pressure campaign -- and a surge in tradable credits used to show compliance with quotas -- reflect growing speculation the Trump administration will dial back the exemptions. Since June 10, the day before Trump got an earful from disgruntled farmers and biofuel producers in Iowa, Renewable Identification Numbers tracking 2019 ethanol mandates have increased 61.4%.
The EPA will now take public comment on its proposed biofuel targets, keeping the agency on track to finalize next year’s quotas before a Nov. 30 deadline. It is still honing a separate, broader “reset” of the Renewable Fuel Standard.
To contact the editors responsible for this story: Jon Morgan at [email protected] Elizabeth Wasserman, Ros Krasny
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