Valero leaves U.S. ethanol trade group due to cost cutting

Source: By Michael Hirtze, Reuters • Posted: Tuesday, January 23, 2018

CHICAGO (Reuters) – Valero Energy Corp, the largest American oil refiner, has left a biofuels lobbying group due to cost cutting, a company spokeswoman said in a statement, just over a year after joining the organization amid efforts to overhaul the U.S. renewable fuel program.

Valero became the largest ethanol producer member of the Renewable Fuels Association (RFA) when it joined in November 2016 as part of a quiet influence campaign to alter the U.S. biofuels program, according to a Reuters investigation last year.

The company claimed complying with the program known as the Renewable Fuel Standard was too expensive. Under the policy, Valero and other oil refiners must mix ethanol with gasoline or buy paper credits to comply. Valero in 2016 spent $750 million buying the fuel credits.

The company sought to shift the point of obligation in the ethanol policy from refiners to others such as fuel station owners – a proposal that it had urged RFA to support.

However, the U.S. Environmental Protection Agency in October dealt a blow to those efforts when it declined to reform the rule.

Valero spokeswoman Lillian Riojas in the statement said the company did not renew its RFA membership due to cost cutting in associations. “As one of the nation’s largest producers of renewable fuels, we expect to continue to work with RFA on the issues that impact our renewables business,” she added.

Bob Dinneen, president of the RFA, confirmed Valero was no longer a member of the group.

Reporting by Michael Hirtzer in Chicago; editing by Richard Valdmanis and Cynthia Osterman