Biden Set to Break Biofuel Logjam With Proposed Quotas Soon

Source: By Jennifer A Dlouhy, Bloomberg • Posted: Thursday, December 2, 2021

The Biden administration is set within days to propose long-awaited quotas for blending biofuels into gasoline and diesel, according to people familiar with the matter.

The anticipated Environmental Protection Agency plan comes amid a long delay setting the targets for 2021, which under federal law were required to be finalized more than a year ago. Administration officials are preparing to propose the quotas within days and have briefed lawmakers that the measure is coming as soon as Friday, said the people, who asked for anonymity because the plan isn’t public.

With the 2021 quotas unlikely to be finalized before next year, the requirements are likely to hew closely to actual biofuel consumption, instead of more aggressive targets that could boost demand. That would be a blow to producers of corn-based ethanol and soy-based biodiesel that have pushed for increases.

The EPA is set to propose revised blending requirements for 2020 while outlining new targets for 2021 and 2022. EPA Administrator Michael Regan has stressed that while the agency is listening to all stakeholders, it is committed to “following the law,” even if that means “there may be people unhappy with various elements” of the proposal.

The EPA sent its drafted plan to the White House for interagency review in August. The timing of its release could still change as the EPA has backed off past plans to propose quotas.

Efforts to set new requirements have been stalled while the administration navigated competing demands from Democratic allies — including senators representing rural, biofuel-producing states as well as those with major oil refining assets back home. Concerns that Midwestern Democrats upset over the proposal could complicate the administration’s efforts to pass its Build Back Better tax-and-spending plan also have been a factor in the delay.

Labor leaders and oil refining advocates have pushed the administration to set modest requirements that reflect a pandemic-spurred drop in fuel demand and compensate for 2020 targets they say exceeded blending capacity. Biofuel producers and rural interests have warned that any move to undercut quotas risks alienating supporters in the Corn Belt and would be seen as a betrayal of President Joe Biden’s campaign trail promise to protect the U.S. Renewable Fuel Standard program.

— With assistance by Kim Chipman

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