Washington — US biodiesel producers are urging the Trump administration to increase blending volumes in the 2020-21 biofuel mandate to make up for lost demand from waivers granted to small oil refiners.
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The National Biodiesel Board and 33 of its member companies said in a letter to the White House Monday that the small refinery waivers are "compounding the policy headwinds" faced by the industry, including the expired $1/gal biodiesel blenders tax credit and a Department of Commerce proposal to end countervailing duties on Argentinian biodiesel imports.
Anger in farm country over the Renewable Fuel Standard waivers and the impact of the US/China trade dispute has gotten the attention of President Donald Trump, who is counting on Midwestern states for his re-election campaign. On August 29, Trump promised a "giant package" that would benefit the biofuel industry.
"We are asking the administration to, first, restore the RFS volumes undercut by small refinery exemptions over the past several years and, second, continue to provide growth for biodiesel and renewable diesel in the RFS program," Kurt Kovarik, NBB's vice president of federal affairs, said Tuesday.
The American Petroleum Institute said last week it is "deeply concerned" by changes to the US biofuel mandate that the White House is considering.
"This rushed and arbitrary course deviation will only further distort the fuel market while providing little, if any, relief to farmers," said Frank Macchiarola, API's vice president of downstream and industry operations. "We hope the administration walks back from the brink of what would be a disastrous political decision that potentially hurts American drivers."
RINs ON THE RISE
The latest battle between biofuel makers and oil refiners flared up August 9, when the Environmental Protection Agency issued 31 waivers exempting smaller refineries from the RFS.
Biofuel makers argue the waivers have gutted demand and led to a wave of ethanol plant closures, while oil refiners argue they have not hurt ethanol production, sales, or demand.
S&P Global Platts Monday assessed D6 ethanol RINs for 2019 compliance at 17.75 cents/RIN and 2018 credits at 9.25 cents/RIN. On August 9, D6 RINs were at 19.75 cents/RIN for 2019 and 15.5 cents/RIN for 2018.
D4 biodiesel RINs were assessed Monday at 45.5 cents/RIN for 2019 and 35.5 cents/RIN for 2018, compared with 48.5 cents and 43.75 cents, respectively, August 9 before the latest batch of waivers.
RINs are tradable credits EPA issues to track production and use of alternative transportation fuels. For corn-based ethanol, one gallon of ethanol yields one RIN.
EPA has until the end of November to issue its final 2020-21 RFS volumes, but biofuel industry sources said the Trump administration would need to take action in the coming weeks to prevent more ethanol plant closures.
In July, EPA proposed a 2020 biofuel mandate of 20.04 billion gallons, up less than 1% from this year. Renewable fuel would make up 10.92% of US transportation fuel supply next year before any refinery waivers, if volumes are approved as proposed.
The conventional ethanol mandate would remain at 15 billion gallons. The biofuel industry had hoped for a 2020 conventional ethanol mandate of 15.5 billion gallons, after an appeals court ruled in 2017 that EPA had improperly waived 500 million gallons in the 2016 mandate.
-- Meghan Gordon, firstname.lastname@example.org
-- Edited by Valarie Jackson, email@example.com