EPA recommends retroactively lowering 2020 biofuel blending mandates

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The US Environmental Protection Agency (EPA) has recommended retroactively lowering biofuel blending mandates for 2020, Reuters reported.

According to Reuters, two sources familiar with the matter shared the details after the agency sent a proposal on the mandates to the White House for review.

The move could provide immediate relief to oil refiners that have to comply with the blending requirements. It is also likely to drag the Biden Administration further into a clash between oil refiners and the biofuels industry over the requirements.

Under the US Renewable Fuel Standard (RFS) programme, oil refiners must blend billions of gallons of biofuels into the nation’s fuel mix, or buy tradable credits – known as RINs – from those that do.

Farmers and biofuel producers argue that reducing mandates harms demand for their products, though refiners reject that claim and say the costs of the programme puts refinery jobs at risk.

Sixteen US Senators wrote to EPA Administrator Michael Regan on 23 August, urging the EPA to mitigate the harm imposed on consumers and refiners by ‘unachievable mandates’ under the RFS.

In the letter, the Senators said: “Obligated parties subject to the onerous requirements of the RFS have been facing historically high compliance costs, which threaten the viability of these entities’ continued operations.

“In light of COVID-19’s impact on the demand for refined product and the burden of RFS compliance, we urge you to waive or significantly reduce the renewable volume obligation, for compliance year 2020, and set the 2021 and 2022 RVOs at levels that comport with reality

“We urge the EPA to take action to reduce RFS compliance costs in order to avert additional financial hardship for consumers and protect the continued viability of US refineries.”

On 26 August, the EPA confirmed it had sent the biofuel blending proposal to the White House’s Office of Management and Budget. The agency was also expected to recommend to the White House reducing mandates for 2021, while boosting mandates for 2022, above the previous two years.