12/02/26
US E15 group floats fewer biofuel mandate waivers
New York, 12 February (Argus) — US lawmakers are weighing a proposal that would
make it harder for oil refiners to win exemptions from annual biofuel mandates
but still let regulators decide which companies deserve relief. The US House of
Representatives last month punted on legislation that would allow year-round
sales of 15pc ethanol gasoline (E15) and revamp the biofuel quota program,
instead tasking a "rural domestic energy council" of more than 20 Republican
lawmakers with hashing out reforms. One provisional plan circulated by the
council this week would cap the total volume of future exemptions, according to
four people familiar with the proposal and a draft framework shared with Argus .
The US Environmental Protection Agency (EPA) requires oil companies to annually
blend biofuels or buy Renewable Identification Number (RIN) credits from those
that do, while letting small refineries bid for hardship exemptions that can
save them tens of millions of dollars. Exemption decisions have varied wildly
over time, from mass denials under former-president Joe Biden to generous
exemptions under President Donald Trump that has frustrated farmers. 450mn RIN
cap The House task force's proposal would make the program somewhat more
predictable. EPA would initially have to exempt 450mn RINs from annual biofuel
obligations but no more, prioritizing companies that prove the most hardship.
That would be a substantial drop from the nearly 1bn RINs the Trump
administration has already exempted from 2024 quotas, initially set at 21.5bn
credits. If mandates rise over time, EPA must proportionally raise that 450mn
RIN cap. One gallon of corn ethanol generates 1 RIN, while more energy-dense
fuels like renewable diesel earn more. Unexpected exemptions can hurt RIN
prices, cutting into biorefinery margins and curtail demand for crops like corn
and soybeans. Other changes would limit — but not entirely eliminate — EPA's
discretion. Regulators would have to largely stick to their current system for
measuring hardship, which factors in criteria like a refinery's access to
capital. EPA would also have to consider "additional materials" determined by
the council to limit "abuse", though the framework does not elaborate on what
this would entail. An earlier proposal backed by the American Petroleum
Institute and ethanol groups would have restricted exemptions to companies with
limited collective refining capacity, angering some larger companies that would
have lost the ability to win exemptions for smaller units they own. The latest
proposal would leave it to EPA to decide which facilities deserve relief,
letting small companies, mid-sized refiners like Delek and even oil majors like
Chevron still compete for a smaller pool of exemptions. EPA could not force
larger oil companies to blend more biofuels to offset exemptions for their
smaller rivals and would have to automatically extend exemptions if it takes
more than six months to weigh a company's new request. The framework would also
keep the program focused around fuels that retailers can easily blend, blocking
EPA from ever reviving a Biden plan to credit biogas that powers electric
vehicles. The proposal shared with Argus makes no explicit mention of removing
summertime limits of E15, though that is the top priority for farm-state
lawmakers on the council keen to help corn farmers. Trump has made clear too he
wants to expand E15 access . The framework would require EPA to finalize E15
labeling and storage standards. The proposal includes no details on timing. Some
biofuel advocates have pushed delaying any changes to 2028, worried that
near-term shifts could delay the Trump administration's goal of finalizing new
biofuel quotas before April. Not final, still an uphill battle The framework is
just one idea the council is weighing and could change. A legislative source
familiar with the debate told Argus that "nothing definitive has been decided".
The council has a goal of aligning around fuel market reforms by 15 February.
Afterwards, any plan would likely need to be added to larger legislation to have
a chance of passing, such as a farmer aid package. Advocates of the plan face an
uphill battle. Some Republicans, including in the US Senate, have long pushed
for more substantial reforms to the biofuel mandates than what the task force
has contemplated. The framework only alludes to these concerns, requiring a
government watchdog agency to regularly study how the program impacts fuel
prices and US refining capacity. Democrats, already frustrated they were left
off the council, could also resist permanently excluding electricity. By Cole
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