Sources say that the US is expected to approve the expanded biofuel waivers on Monday.
According to two sources familiar with the issue, the Trump administration will likely approve a larger number of exemptions for U.S. refiners in order to reduce pressure on gas prices.
Farm-state legislators had urged the White House to not expand waivers beyond amounts flagged at this year's start, even though refiners sought them to reduce fuel production costs. Farmers are concerned that the waivers will reduce the demand for their crops. However, both sides disagree about whether the expansion of the waivers can really lower gas prices.
Sources said that the Environmental Protection Agency will issue waivers to small refineries for the last year, covering over 1.8 billion credits of renewable fuel. The waivers are being sought by Marathon Petroleum and Chevron.
This is roughly twice the amount of credits that the agency originally planned to offer for the year.
The EPA, after a lobbying campaign by farm-belt legislators and?their allied, is considering a plan that would offset the harm caused to farmers by the expanded 'exemptions' by reopening 2027 biofuel quotas and adding approximately 500 million renewable fuel credit or possibly more, according to the sources.
Sources said that the EPA had stated earlier in the month that they would decide on any pending exemptions by the end August. However, it could be Tuesday before the decision is made.
The White House referred all questions about the latest waiver issuance on to the EPA. However, the EPA did not respond to any requests for comments.
According to people familiar with the situation, the expanded plan is part a larger White House effort 'to manage gasoline costs that have risen during the U.S. war with Iran. The administration is looking at ways to reduce pressure on the pump, but it's also keen to avoid a backlash by farmers in advance of November's elections.
The decision places President Donald 'Trump' in the middle of a long-standing battle between the oil refinery and biofuel industries, over the nation’s Renewable Fuel Standard. This standard requires refiners blend increasing amounts ethanol and renewable fuels into gasoline and diesel.
Farm-state legislators have warned that a wide range of exemptions may depress the demand for crops, and undermine the biofuels industry. Refiners claim that mandates can be expensive when credits to comply with the mandates are costly.
The Renewable Fuel Standard established by Congress requires that refiners or fuel importers blend certain volumes of renewable fuels into the nation's fuel supply, or purchase credits known as RINs.
Small refineries may be exempted from these requirements if compliance would result in disproportionate hardship. Both the agricultural and refining industries have put pressure on the EPA to give as many waivers as possible.
(source: Reuters)
