EPA seeks to boost biofuels mandate

The Trump administration is proposing to modestly increase the amount of ethanol and other biofuels that the nation’s oil refiners have to blend into the gasoline and diesel they sell.

Under the proposal released Tuesday by the Environmental Protection Agency (EPA), the overall biofuel mandate under the Renewable Fuel Standard (RFS) would be 19.88 billion gallons in 2019, a 3.1 percent increase over the 2018 levels.

Only 15 billion gallons of that could be traditional ethanol made from feedstocks like corn and soy, while the rest would have to be other biofuels like cellulosic ethanol and biodiesel.

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The proposal comes amid efforts by President Trump to balance strong ethanol interests in the country’s heartland and oil and refinery interests, both of whom are lobbying aggressively for changes to how the EPA enforces biofuels rules.

EPA head Scott Pruitt focused in his Tuesday statement on the fact that he is on track to get the 2019 mandate final by Nov. 1, the legal deadline, which the Obama administration often missed.

“I’ve traveled to numerous states and heard first-hand about the importance of the RFS to farmers and local communities across the country,” Pruitt said in a statement.

“Issuing the proposed rule on time meets Congress’s statutory deadlines, which the previous administration failed to do, and provides regulatory certainty to all impacted stakeholders.”

EPA also proposed Tuesday to set the 2020 biodiesel level at 2.43 billion gallons, up from 2.1 billion gallons in 2019.

The EPA mulled increasing biofuel requirements by about 1.5 billion gallons to make up for controversial waivers the agency has been giving to small refiners to relieve them of the mandates, two sources familiar with the issue said, but decided in the end not to pursue that plan.

The ethanol industry and its congressional supporters have slammed the biofuel waivers and accused the Trump administration of giving them out too easily to refineries owned by major companies. Reuters reported earlier Tuesday that the EPA ignored the Energy Department’s advice multiple times to decline waiver requests.

The refiner industry has been strongly supportive of the waivers. An appeals court ruled last year that the EPA improperly denying waivers to many refineries and needed to change its consideration process.

Ethanol advocates said the increase didn’t go far enough, though oil companies weren’t pleased either.

“It would seem a hollow and cynical exercise to praise or thank EPA Administrator Pruitt for appearing to follow the statute with this [proposal],” Renewable Fuels Association President Bob Dinneen said in a statement.

“While we acknowledge that the implied 15-billion-gallon requirement for conventional biofuels like corn ethanol should, in theory, send a positive signal to the market, it comes with the backdrop of 1.6 billion gallons of demand destructed by illegal waivers to small refineries and no commitment that EPA is changing its approach to granting these exemptions.”

Sen. Joni Ernst (R-Iowa) said the proposal “is encouraging, but does not make up for about 1.6 billion gallons lost by Administrator Pruitt’s decision to hand out an unprecedented number of small refinery waivers.”

The American Petroleum Institute said the proposal doesn’t change the RFS program’s flaws.

“EPA made the right call in not reallocating the waived small refiner exemption volumes, however the agency’s latest proposal for 2019 is yet another example — in fact it’s an annual example of a broken government program that needs a comprehensive legislative solution that includes the sunset of the program,” said Frank Macchiarola, the group’s downstream director.

Updated: 5:28 p.m.