Biden administration proposes lower mandates for biofuels for 2020

The Environmental Protection Agency has proposed reducing the amount of biofuels petroleum refiners are required to add to petroleum fuels in an attempt to give the refining industry some breathing space amid the damage to demand and high prices.

While it may appear that the move is a favor for the oil industry, the industry is not happy with it, Reuters said. reported, adding that the biofuels industry is also unhappy, albeit for more obvious reasons.

“This move is an about-face by President Joe Biden who campaigned on his supposed support for renewable fuels,” said Senator Joni Ernst, a Republican from Iowa, a major ethanol producer.

The American Petroleum Institute, on the other hand, said the EPA “would best serve the public interest by maintaining achievable compliance volumes.”

The volumes in question were retroactively reduced in the proposal to 17.13 billion gallons for 2020, from 20.09 billion gallons previously. For 2021, the volume has been set at 18.52 billion gallons, and for 2022, the amount of biofuel refiners that refiners would need to mix with their fuels has been set at 20.77 billion gallons.

At the same time, the EPA has proposed to reject up to 65 requests for exemptions from the biofuels mandates – these exemptions are given to small refiners for whom it would be financially difficult to blend the required amounts of biofuel into their gasoline and their diesel. .

The mandate of biofuels is a subject of permanent dispute for successive administrations because it forces politicians to juggle the interests of the corn and oil lobbies.

While the battle between refiners and producers of corn is long drawn out, there is a new participant this year: the American Bakers Association. With the rise in prices of agricultural products and continued disruptions in the supply chain, it is highly likely that bread and other baked goods will also become more expensive. With corn being a staple agricultural commodity widely used in the baking industry, earlier this year the ABA began lobbying the Biden administration to reduce or at least stop the increase in biofuel mandates.

By Charles Kennedy for Oil chauffage

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Felix J. Dixon