Sources: Trump and officials discuss expanding refinery waivers, as the farm backlash increases.
People familiar with the meeting say that President Donald Trump, his energy, environment and agriculture chiefs discussed on Wednesday a plan to protect?biofuel? producers from the impact of small refinery exemptions.
Sources claim that the White House supports a plan for a significant expansion of the controversial small refinery exclusion program. This has prompted resentment from the U.S. Farm Belt.
The officials said they wanted to lower gasoline prices, which have increased during the war against Iran. This is to help Trump and his fellow Republicans maintain control of Congress at November's midterm election.
As traders expect a weaker demand for Biofuels, the price of Renewable Fuel Credits (RINs) has already dropped sharply.
Farmers and oil refiners have been arguing for years over whether the consumer pays more when prices of renewable fuel credits rise.
A coalition of biofuel and farm groups called on Trump to reject the proposed expansion of waivers for biofuel blending requirements. They warned that an increase in waivers would harm rural America, as it would reduce demand for renewable fuels and crops.
In a letter sent to Trump by the Renewable Fuels Association and Growth 'Energy, as well as the National Farmers Union said that the administration should maintain exemptions for 2025 compliance in line with volumes assumed by the Environmental Protection Agency when setting?the nation’s biofuel blend requirements for 2026-2027.
Sources have said that the administration is looking at roughly doubling exemptions from 990 millions credits to 1.8 billion. Sources say a decision will be made before the end August.
The groups warned that granting exclusions far above those anticipated by the EPA could "decimate" the "demand signal" created by EPA's March rule establishing the RVOs for 2026 and 2027.
The groups warned that excessive exemptions could lead to a collapse of the biofuel market and a reduction in demand for corn oil and soybean oil.
An official at the White House said that Trump's Administration will make a "decision which is best for consumers and farmers as well as energy supply chains." The EPA didn't immediately respond to a request for comment.
The Renewable Fuel Standard requires refiners and fuel suppliers to either blend specified amounts (such as ethanol or?biodiesel) into U.S. fuel supplies, or purchase RINs in order to comply.
Some plants can avoid all or part of these obligations by demonstrating economic hardship. The administration can grant exceptions to the rule, but the fuel volume exempted is effectively removed from the marketplace unless it later reallocates the obligation.
Trump and the heads of the agencies discussed a plan that would restore lost gallons in the future biofuel quotas which are annually set. Uncertainty surrounded the exact plan.
Senator Joni Ernst of Iowa, a Republican, has criticized any potential expansion to the exemptions. She told? In a statement, it was said that this is "a handout for Big Oil?falsely advertised as relief at 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 Timothy Gardner; David Gregorio, Deepa Babington and Deepa Gardner)
(source: Reuters)
