Trump administration could delay biofuel credit cuts as refiners balk

According to sources familiar with this matter, the Trump administration may delay for one or even two years the proposed cut in incentives for biofuels imported from the United States. This is due to pressure by U.S. refining companies who claim that the move would increase costs and reduce fuel supplies.

The current delay could be welcomed by domestic oil refiners who have invested in bio-based diesel, but it would frustrate U.S. biofuel and agricultural producers.

The Environmental Protection Agency's proposal to reduce the value of renewable fuel credit given by the U.S. Government for imported biofuels, was originally pitched as part of Trump’s “America First” energy agenda. It was intended to go into effect on January 1.

Sources, who spoke on the condition of anonymity, said that the Environmental Protection Agency was evaluating a plan to postpone implementation until 2027-2028.

The EPA stated that it is reviewing comments from the public before issuing final regulations in the next few months. The agency refused to comment on if it was considering a delay. The White House has not responded to requests for comments.

Big Oil, led the influential American Petroleum Institute, had argued limiting credits for the foreign supply would constrain availability and drive fuel prices higher. This is something the White House wants to avoid, as affordability is a major political concern going into the next year's Congress elections.

The EPA proposes to reduce the amount of credits available for imported biofuels. This shift will have a significant impact on bio-based fuels, which rely on imports in order to meet federal requirements.

The fuel industry closely monitors the decision by the administration to delay the possible implementation of the regulation.

Other issues include finalizing the 2026 biofuel blend mandates, deciding whether or not to allow gasoline blended with 15% of ethanol or E15 to be sold year-round, and deciding whether or how to require large refiners compensate for exempted gallon under the small refinery exemption program.

Sources said that the protracted U.S. shutdown and efforts to resolve an obstruction of small refiners' requests for exemptions to U.S. laws on biofuels have contributed to delays in resolving regulations related to biofuels. Reporting by Jarrett Renshaw, Editing by Richard Valdmanis & Will Dunham

(source: Reuters)