Changes sought by US independent refiners to federal biofuel mandates would not improve access to the fuel and would likely stoke confusion in the marketplace, the US Environmental Protection Agency (EPA) said today.
The agency proposed denying refiners' request that EPA shift the burden of complying with the Renewable Fuel Standard (RFS) closer to the companies that blend biofuels into the US transportation fuel supply. EPA would seek public comment before making a final decision, the agency said.
The comment period is likely to stretch into the next US presidential administration.
"We do not believe that the petitioners have demonstrated that changing the point of obligation would likely result in increased use of renewable fuels," the agency said in its proposed denial. "While we do not anticipate a benefit from changing the point of obligation, we do believe that such a change would significantly increase the complexity of the RFS program which could negatively impact its effectiveness."
US biofuel mandates require that refiners, importers and other companies adding to the US transportation fuel supply ensure that rising volumes of biofuels blend into the domestic pool. EPA in May proposed such companies next year add renewable fuels equal to 10.44pc of their conventional production. Final volumes were expected later this month.
Obligated companies collect renewable identification numbers (RINs) to prove compliance with the law. Companies can either generate their own RINs by blending biofuels and conventional fuels or purchase the credits from other parties.
Merchant refiners, which largely lack sufficient infrastructure to blend their full production, have argued that the program encourages blenders to profit from RINs rather than invest to expand consumer access to higher volumes of biofuel. Valero, PBF Energy and other US independent refiners have pushed EPA in petitions, in Congress and in court to shift the point of obligation closer to blenders.
Valero considered the decision to open discussion on the proposal a good step.
"We look forward to working closely with EPA on RINs issues even as the agency transitions to new leadership," the company said today. "When all of the information is in the docket, we believe EPA will have no choice but to move the point of obligation."
Opponents of the proposal quickly cited EPA's wariness of the change. Renewable Fuel Association chief executive Bob Dinneen supported EPA's proposed denial as well as the decision to open the matter to public comment.
"We are grateful that EPA wholeheartedly agrees with us," National Association of Truck Stop Operators chief executive Lisa Mullings said.
A 60-day public comment period would begin when EPA publishes the proposal in the Federal Register. Such timing would likely mean the period would continue into the administration of president-elect Donald Trump, who took actions encouraging both sides of the issue on the campaign trail.
