Trump Wants Oil and Biofuels Lobbies to Decide Renewable Fuel Policy
The U.S. Administration has left it to the oil companies and ethanol producers to reach an agreement on the next renewable fuel standard, sources with knowledge of the discussions told Reuters, as the Trump Administration looks to avoid creating further controversies between the Farm Belt and oil producers and refiners.
The so-called Renewable Fuel Standard (RFS) is the U.S. policy under which oil refiners are required to blend growing amounts of renewable fuels into gasoline and diesel. It sets the number of gallons of renewable fuels that must be blended into the nation’s total fuel supply each year. Refiners that do not have the infrastructure to blend biofuels must purchase tradeable blending credits.
The oil groups and the ethanol producers have opposite interests in this policy.
By leaving the new details to be decided by these two groups, the Trump Administration seeks to avoid controversies that marked the renewable fuels policy during President Donald Trump’s first term in office in the late 2010s.
Following a directive from the White House, the oil and biofuel lobbies have already held two meetings to discuss the details, according to Reuters’ sources.
“It makes it easier for (the Trump administration) to arrive at whatever number they arrive at if they are hearing from groups that have historically been at the opposite sides of this,” Will Hupman, vice president of downstream policy at the American Petroleum Institute (API), told Reuters.
Oil and ethanol industry officials have discussed the blending volumes in the RFS mandate, biofuel tax policy, and exemptions from the mandate for small oil refiners, according to Reuters’ sources which include Hupman.
Under the RFS program, the EPA may grant a temporary exemption to a small refinery from the annual Renewable Volume Obligations (RVOs) if the refinery can demonstrate that compliance with the RVOs would cause the refinery to suffer disproportionate economic hardship.
By Tsvetana Paraskova for Oilprice.com
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