Farm and biofuel groups ask Trump to limit expanded refinery exemptions
A coalition of U.S. biofuel and farm groups has called on President Donald Trump to reject a proposal for an expansion of waivers from the nation’s biofuel blend requirements. They warned that an increase in waivers would harm rural America, by reducing demand for American crops. People familiar with the issue say that the White House supports a plan to expand the controversial program for small refineries exemptions. Officials want to bring down gasoline prices, which have been rising during the war with Iran. This could help Trump and his fellow Republicans win control of Congress at November's midterm election. As traders expect a weaker demand for Biofuels, the prospect of an expansionof refinery exemptions has already caused prices for Renewable Fuel Credits (RINs) to drop sharply. Farmers and oil refiners have argued for years about whether consumers pay more when the price of renewable fuel credits rises. The groups, including the Renewable Fuels Association Growth Energy, and the National Farmers Union wrote to Trump, urging him to keep the exemptions in place for the 2025 compliance period, in line with volumes assumed by the Environmental Protection Agency when setting the nation's 2026 and 2027 biofuel blend requirements.
Sources have said that the administration is looking at roughly doubling exemptions from 950 million to 1.8 billion. Sources say a decision will be made before the end August.
The groups said that granting exemptions far above what the EPA anticipated would "decimate" the "demand signal" created by March's rule by the agency setting 2026 and 2027 RVOs. The groups warned that the consequences of granting exemptions above what was anticipated by the EPA would be "severe and immediate" and that it could lead to a collapse in biofuel markets, reduce demand for soybean and corn oil, and further weaken rural economy.
The White House referred questions to the EPA. The EPA didn't immediately respond to comments. Renewable Fuel Standard (RFS), which was implemented in 2007, requires that refiners, fuel importers, and fuel producers blend a certain amount of renewable fuels, like ethanol or biodiesel into U.S. fuel supplies, or purchase renewable identification numbers (RINs), to prove compliance. Certain smaller refineries can be exempted from some or all of these obligations by demonstrating a disproportionate amount of economic hardship. The administration can grant exemptions to certain refineries if they can demonstrate disproportionate economic hardship.
Senator Joni Ernst of Iowa, a Republican, has criticised the potential expansion?SREs. She said in a press release that it is "a handout for Big Oil, falsely marketed as relief at the pump."
The removal of American biofuel from the market will not lower gas prices. Instead, it will reduce demand for corn and soyabeans while lining the pockets and wallets of refiners who are already making record profits. "Farmers lose, consumers don't get anything, and oil companies make a lot of money," Ernst said. (Reporting by Jarrett Renshaw, Editing by David Gregorio).
(source: Reuters)
