EPA draft would lift US biofuel blending mandates slightly in 2021 – sources

Source: By Stephanie Kelly, Reuters • Posted: Thursday, May 21, 2020

(Reuters) – The U.S. Environmental Protection Agency has proposed lifting the amount of biofuels that refiners must blend into their fuel next year to 20.17 billion gallons, from 20.09 billion this year, according to two sources familiar with the details of an agency draft proposal.

The 2021 volumes would include 15 billion gallons of conventional biofuels like ethanol and 5.17 billion gallons of advanced biofuels, according to the sources. The advanced biofuels mandate would include 670 million gallons of cellulosic biofuel, up from 590 million gallons in 2020, they said.

EPA’s proposal would also place the 2022 mandate for biodiesel at 2.76 billion gallons, from 2.43 billion in 2021, sources said. The agency sets biodiesel mandates two years ahead.

An EPA spokesperson declined to comment.

The draft proposal is currently being reviewed by the White House.

The EPA is charged with setting biofuel and biodiesel blending requirements for the refining industry as part of the Renewable Fuel Standard, a regulation aimed to help farmers and reduce U.S. dependence on oil.

Under the RFS, refiners must blend billions of gallons of biofuels into the nation’s fuel pool or buy credits from those that do. Refiners say the obligations are too costly, while farmers benefit from an expanded market for their crops.

Small refineries can be exempted from biofuel blending if they prove that complying would cause them financial strain. The waivers have been a lightning rod for controversy, as the Trump administration has made wide use of the exemptions, angering biofuel advocates, who say they hurt ethanol demand.

Reporting by Stephanie Kelly and Laura Sanicola; Editing by Richard Valdmanis and David Gregorio