Squabbling Intensifies Over EPA Biofuel Blending Target

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The US Environmental Protection Agency (EPA) is said to be considering lowering its 2021 targets for how much biofuels must be blended into gasoline, queuing up a policy fight between refining and ethanol interests. Rumors have swirled for weeks that the EPA would recommend lowering blending mandates under the Renewable Fuel Standard (RFS) below 2020 levels through 2022 before ramping them back up, which was first reported by Reuters. During his election campaign, President Joe Biden pledged to promote biofuel use and production, but balancing the controversial blending requirements has always been a political tightrope for the White House (OD Dec.14'20). Under the RFS, the EPA is required to set blending obligations for each year based on congressionally set targets, but has some latitude for adjusting them. Refiners who cannot meet the blending targets must purchase offset credits known as renewable identification numbers (RINs). Stakeholders have long argued the policy is in dire need of a legislative overhaul, but of course they disagree on what those reforms should look like, while oil lobbyists have long argued that the annual targets are infeasible. Earlier this summer, industry trade group American Petroleum Institute (API) argued in a letter to the EPA that the statutorily mandated blending volumes for 2021 and 2022 are “unachievable” as written by Congress and must be reduced. Failing to lower the targets would exhaust carryover RINs and lead to disruptions in the already volatile RIN market, the oil lobby warned. Moreover, the API has argued that the EPA has already hinted that exemptions known as “hardship” waivers for small refiners unable to meet their blending obligations -- the subject of a lengthy legal battle -- are off the table (OD May19'21). "The EPA would best serve the public interest by keeping compliance volumes feasible and maintaining program stability by not exceeding the ethanol blend wall” or the current market threshold for biofuels percentages, said API Vice President of Downstream Policy Ron Chittim. Cornbelt lawmakers have already raised objections based on the rumors that the EPA will look to lower the 2021 targets. “If the reports are true, then once again, the EPA is giving a gift to Big Oil and is playing games with the Renewable Fuel Standard law,” US Sen. Chuck Grassley (R-Iowa) said earlier this week. Bridget DiCosmo, Washington

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