U.S. fuel industry frazzled as Trump EPA misses 2021 biofuel volumes deadline

Source: By Stephanie Kelly, Reuters • Posted: Tuesday, December 1, 2020

NEW YORK (Reuters) – The U.S. Environmental Protection Agency was set to miss a deadline on Monday to announce how much renewable fuel the nation’s refiners must blend into their fuel mix next year, raising uncertainty in the fuel market and prompting one biofuel association to threaten to take the agency to court.

Under federal law, the EPA must finalize its decision on the annual biofuel blending volume requirements it imposes on the refining industry for the next year by Nov. 30. The agency did not respond to requests for comment.

“At this point, it likely makes more sense to let the new administration handle the 2021 RVO (Renewable Volume Obligations) rulemaking process entirely,” said Geoff Cooper, the president of the Renewable Fuels Association, one of the nation’s biggest biofuel industry groups.

Growth Energy, another U.S. biofuel industry association, said it intends to file a lawsuit to force the Trump administration’s EPA to act “immediately.”

The American Fuel and Petrochemical Manufacturers, a top refinery industry association, said it hoped the EPA will “soon provide certainty” to its members.

Under the U.S. Renewable Fuel Standard, refiners must blend billions of gallons of ethanol and other biofuels into their fuel pool, or buy credits from those that do – a policy that has created a huge market for corn-based ethanol but which the oil industry loathes.

While the Trump administration has mainly hit its deadlines for setting specific biofuel volumes mandates under the RFS, the process this year has been complicated by the economic fallout of the coronavirus pandemic.

Slumping fuel consumption has led refiners to argue for lower volume mandates to match demand, and biofuels producers to argue that doing so would only hurt them more.

The EPA has also left unaddressed a number of other questions that will likely need to be dealt with by the incoming Biden administration, including requests from oil industry advocates for the EPA to ease 2020 compliance because of the impact of the pandemic, and requests from the biofuel industry for the agency to ditch a waiver program it argued has illegally eroded demand for ethanol.

The oil industry says that the waivers hurt ethanol demand.