The US Environmental Protection Agency (EPA) will issue rules changing the market for credits used to prove compliance with federal renewable fuel mandates and expand the sale of higher-ethanol gasoline blends in time for a summer deadline, administrator Andrew Wheeler said today.
The agency will this week issue a rule allowing the summer sale of 15pc ethanol blends of gasoline, called E15, and reducing the volatility of a market associated with the Renewable Fuel Standard (RFS), Wheeler said on the sidelines of the IHS-CERAWeek conference in Houston. EPA would also begin providing information on controversial waivers of the program for small refineries approved for the 2017 and 2018 compliance years within the next two weeks, he said.
Both actions would help stabilize prices for renewable identification numbers (RINs) needed to comply with the program, he said.
"I think the combination of both those things taken together, the stability that we are providing the program as well as the transparency provided to the program, should help keep RIN prices low," Wheeler said.
RFS requires refiners, importers and other companies to each year ensure minimum volumes of renewables blend into the gasoline and diesel companies add to the US transportation fuel supply. Obligated companies prove compliance by acquiring RINs representing each ethanol-equivalent gallon of renewables blended into the transportation pool.
The rules EPA will issue this week follow instructions from President Donald Trump last fall directing a change in Clean Air Act regulations to extend the sale of E15 into the higher-demand summer months. EPA paired the adjustment with still unpublished changes to how obligated parties and blenders buy and sell RINs. Issuing the rule will trigger a public comment period.
Blenders and integrated refiners who generate enough RINs to sell to obligated refiners each year have argued that changing the policy rewards companies that refused to invest to comply with the standards and will punish those who did.
EPA wants to limit large swings in credit prices seen over the past two years, Wheeler said.
"We want them to continue to make those investments but we also want to make sure that it is a fair marketplace," Wheeler told Argus. "We want to keep the RIN prices low and stable, and to quit having the wild fluctuations in the RIN prices."
The agency must also make decisions on waivers of that program for small refineries that face several court challenges, including allegations last week that documents show that the EPA under former administrator Scott Pruitt improperly expanded the use of exemptions.
Wheeler declined to comment on how many waivers the EPA expected to approve this year, and said that the agency would follow guidance from recent court cases, Congress and the Department of Energy.
The EPA under Pruitt approved 29 of 37 applications for waivers for the 2017 compliance year, effectively reducing overall obligations for the year by 8pc.
"Those have not ended up on my desk yet, so I do not want to prejudge which waivers were, how many there will be or whether or not it is the same number," Wheeler said.
US senators confirmed Wheeler as agency administrator in late February, roughly eight months after he was made interim administrator. Pruitt left the agency under a cloud of ethical and political issues in early July.
