Exemptions for refiners not meeting blending requirements may be few and far between.
President Biden has made no secret of his climate agenda, which is likely to boost ethanol production in the U.S., the Wall Street Journal reports. The Environmental Protection Agency (EPA) under the Trump Administration issued 85 exemptions for refiners who didn’t meet the required blending mandates of the Renewable Fuel Standard (RFS), a significant increase from the 23 issued during former President Barack Obama’s second term.
Under the Biden Administration, oil refiners seeking similar exemptions might find them difficult to obtain, especially in light of a January 2020 court of appeals ruling that the EPA should not have offered three refineries renewable fuel exemptions. Two of the three refiners appealed the decision to the U.S. Supreme Court, which will soon hear arguments.
New EPA officials will set blending obligations for this year, as the Trump Administration missed the Nov. 30 deadline. Analysts predict the mandates will probably be stringent for 2021 and 2022, with strong agency enforcement.
Another point of contention will likely be a national low-carbon fuel standard, which the Renewable Fuels Association favors and the American Fuel & Petrochemical Manufacturers (AFPM) opposes. AFPM wants a national octane standard to replace the RFS, which the ethanol industry doesn’t want.
Further complicating matters is the Biden Administration’s push of electric vehicles and policies friendly to EVs. “It will be interesting to see how ethanol and biodiesel interests potentially line up with their gasoline and diesel counterparts,” noted Susan Lafferty, partner at law firm Eversheds Sutherland.