According to a document reviewed by Reuters, US President Joe Biden’s administration is considering slashing the country’s Biofuel blending regulations, a move prompted by a drop in gasoline consumption during the coronavirus outbreak. The plan, if implemented, would be a win for the oil sector, notably PBF Energy and CVR Energy, which believe that Biofuel mixing is expensive.
The changes would enrage ethanol manufacturers like Archer-Daniels-Midland Co. and corn farmers across the country who supply the raw materials for ethanol. It is by far the most extensively used Biofuel. RINs, the credits required to certify compliance with the regulations, fell to 92 cents each after Reuters reported the news, dealers said, down from $1.07 the previous day. According to the paper, Biden’s Environmental Protection Agency, which oversees the country’s Biofuel policy, blending regulations for 2020 and 2021 would be reduced to around 17.1 billion gallons and 18.6 billion gallons, respectively.
Before the coronavirus pandemic, a level of 20.1 billion gallons had been set for 2020. According to the document, the government would set the amount for 2022 at around 20.8 billion gallons. The 2020 and 2021 mandates are being imposed retroactively by the EPA. The ethanol industry would be the hardest hit. According to the paper, conventional renewable fuel levels would drop from 15 billion gallons to around 12.5 billion gallons in 2020, 13.5 billion gallons in 2021, and 14.1 billion gallons in 2022.
The EPA declined to comment for this article, but administration officials stressed that the figures are preliminary and might be revised before passing through an interagency review process. In August, the agency submitted a request to the Office of Management and Budget to review.