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Highlights

Conventional ethanol mandate stays at 15 billion gallons

EPA keeps 2021 biodiesel mandate flat at 2.43 billion gallons

Washington — US refiners will be required to blend 20.09 billion gallons of renewable fuel into gasoline and diesel in 2020, making up 10.97% of the nation's transportation fuel supply, according to final volumes set Thursday by the US Environmental Protection Agency.

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While EPA expanded an earlier proposal by 50 million gallons, biofuel groups and farm-state lawmakers criticized the final volumes as too small to make up for widespread waivers EPA has granted to small refineries in the past three years.

EPA set the 2020 advanced biofuel mandate at 5.09 billion gallons, up from 5.04 billion gallons proposed in July and 4.92 billion gallons in the 2019 mandate.

That implies a conventional ethanol mandate of 15 billion gallons, the same level since 2017.

EPA kept the 2021 biodiesel mandate at the 2020 level of 2.43 billion gallons. It is set one year ahead of the other biofuel categories. The 2019 biodiesel mandate was 2.1 billion gallons.

The final rule says EPA will account for future small refinery waivers when setting the annual biofuel blending targets, using a three-year average of the relief recommended by the Department of Energy.

For 2020, EPA increased larger refiners' blending obligations by 770 million Renewable Identification Numbers. But biofuel groups argue this under-counts the exemptions that EPA granted from 2016 to 2018, since DOE's recommendations were often lower than the exemptions EPA ultimately granted.

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RINs RESPONSE

D6 ethanol RINs for 2019 compliance have hovered around 12-13 cents/RIN since early November, with trading activity slow as the market awaited the final volumes.

S&P Global Platts on Thursday assessed 2019 credits at 12.5 cents/RIN and 2020 credits at 19 cents/RIN, both up 0.25 cent day on day.

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.

Ongoing acrimony in farm country over the EPA's handling of the Renewable Fuel Standard could have political implications for US President Donald Trump ahead of the 2020 election.

"Over the course of the past few months, we've gone from promises of a 'giant package' to the reality of a lump of coal," said American Coalition for Ethanol CEO Brian Jennings. "To say we are disappointed is an understatement.

"While it was well understood this rulemaking would not make farmers and the ethanol industry 'whole' for the damage EPA has done by abusing the small refinery exemption provision of the RFS, we were led to believe the rule would represent a step in the right direction, an opportunity to account in a meaningful way for refinery waivers."

Republican US Senators Chuck Grassley and Joni Ernst of Iowa said EPA was "playing games" with the biofuel mandate and not holding up Trump's promise to farmers to account for the waived volumes.

"No matter what EPA says about the impact of its waivers to oil companies making billions in profits, farmers and biofuels producers know and feel the negative impact of the agency's actions," the Iowa senators said in a statement.

EPA was on track to release the final Renewable Fuel Standard volumes by Congress' November 30 deadline, until it proposed changes at the 11th hour as part of the Trump administration's attempt to quell farm-state anger about granting small refineries widespread waivers to the biofuel mandate.