Changes in biofuel quotas will increase diesel prices according to oil refiners


By suggesting moderate quotas for the use of biofuels while attempting to prevent exemptions for numerous oil refineries, the Biden team attempted to straddle the line between competing oil and biofuel interests on Dec. 7.

The US Environmental Protection Agency proposed retrospectively lowering biofuel blending limitations for 2020, but also laying out objectives for this year that mirror actual use and a minor increase in 2022.

The EPA is planning to reject proposals from numerous small refineries for exceptions from 2019-2021 requirements under the US Renewable Fuel Standard project, indicating that the Biden management is aiming to minimize damage for both the agriculture and oil industries.

In the meantime, the US Department of Agriculture is considering providing up to $700 million in funding biofuel producers affected by the COVID-19 global epidemic, and the Environmental Protection Agency is considering changes to the law that could significantly increase the production of biofuels produced at multiple facilities.

Environmental Protection Agency Administrator Michael S. Regan stated in an email that this bundle of steps will enable everyone to get the RFS process back in the growth stage by establishing aggressive targets for 2022 and solidifying the program’s base so that it is established in science and the law.

Oil refiners criticized the proposal, claiming it will increase consumer costs while providing no environmental advantages.

This initiative, according to Chet Thompson, CEO of the American Fuel and Petrochemical Manufacturers trade association, would unnecessarily increase already-high RFS costs of compliance, increasing the cost of making gasoline and diesel for consumers in the united states — with no impact on environmental advantage or rise in biofuel blending.

The biofuel regulations come as President Joe Biden confronts rising gasoline costs and inflation pressures that threaten to derail the United States’ economic recovery.

The decision comes after months of discussion over how to establish the objectives in the face of a pandemic-driven decline in gasoline consumption and a rise in costs while still supporting the increased use of maize and soy-based biofuels.

The policy addresses some of the concerns expressed by oil refiners, who said that cutbacks were necessary to address a drop in gasoline sales and compensate for 2020 objectives that they claimed exceeded blending capacity. The Environmental protection agency has previously stated that it intends to postpone the dates for refiners to demonstrate that they have met their limits for 2020 and 2021.

Refiners can utilize tradable biofuel compliance points for two years to verify they’ve met their requirements. Reducing the 2020 limits might prohibit refiners from diving into a pool of previously earned credits to meet objectives that they claim are excessively high.

The entire goal for the present year is 18.52 billion gallons

The government is recommending a small increase for 2022, with a total need of 20.77 billion gallons.

Renewable fuel activists have cautioned the Biden administration that changes to the requirement might destroy years of achievement on low-carbon biofuels, and contradict Biden’s political vows to uphold the mandate.