Following months of debate between the representatives of Big Oil states and Big Corn states over the Renewable Fuel Standard (RFS), Reuters is reporting that President Trump has made a move towards reforming the biofuels industry. The proposed changes include permitting the sale of E15 year-round and counting exports of ethanol towards the Renewable Volume Obligation (RVO) under the RFS.
While the biofuels industry approved the move on E15, it criticised the proposal to count ethanol exports in the RVO. Platts reported that the price for renewable identification numbers (RINs, the tradable credits used to show compliance with the RFS) fell to three-year lows following news of the deal.
“Attaching a RIN to ethanol exports would have a crippling impact on American agriculture – significantly reducing demand for ethanol and corn. It would also have major trade implications, as export RINs would be considered a subsidy by our global trading partners, who will likely challenge this as unnecessary advantage to US ethanol. Further, export RINs would be a clear violation of the RFS, which is intended to increase the domestic use of biofuels,” said Growth Energy CEO Emily Skor. Similar sentiments were expressed by representatives from the National Corn Growers Association and the American Coalition for Ethanol.
The Administrator of the Environmental Protection Agency (EPA) Scott Pruitt has previously said that the agency would not ‘pursue regulations’ to attach RINs to exported ethanol.
The plan scraps proposals by Texas Senator Ted Cruz to cap the price of RINs, which were condemned by the biofuels industry.
Biofuel proponents have also been attacking Pruitt’s use of ‘hardship’ waivers to relieve refiners of their blending obligations under the RFS. Savings from these waivers can reach tens of millions of dollars. In his response to the White House meeting, Iowa Senator Chuck Grassley said: “There was discussion about how to reallocate the waived obligations so that demand for biofuels wouldn’t be hurt.”
Six Senators have sent letters to Carl Icahn and Administrator Pruitt to explain how the businessman and former Trump advisor received a ‘hardship’ waiver for a refinery owned by his multimillion dollar company CVR Energy. Icahn is currently under investigation for his simultaneous roles as White House advisor and private investor in 2017. The Senators wrote: “We… are troubled that a company that is owned by a billionaire former ‘special adviser’ to the President who is currently under investigation by federal prosecutors for his activities in the RFS market, has now received an ‘economic hardship waiver’ from its RFS obligations.”