White House to consider plan for clearing record backlog in biofuel waivers for small refineries
Three sources familiar with these plans say that the White House is considering a plan for clearing a backlog of exemption requests from small refineries from U.S. Biofuel Laws. This could include approving current applications and asking industry input on older ones.
The U.S. Renewable Fuel Standard (RFS) requires refiners either to blend biofuels such as corn-based ethanol in the nation's fuel supply, or purchase renewable fuel credits known as RINs from those who are doing so.
If they can prove financial hardship, small refineries can apply to the Environmental Protection Agency for an exemption. More than 160 exemption requests are pending, which could represent tradeable credits worth billions of dollars.
The decision by the Trump administration to clear up the backlog will have a significant impact on the oil and agriculture industries. It will affect the prices of products such as gasoline, renewable diesel, soybeans, corn and the companies who produce them. Credit prices have been lowered in the past due to widespread exemptions, as well as prices for soybeans, ethanol, and other commodities.
Sources said that the White House was considering granting some of the 19 exemption requests from 2024 and issuing a regulation seeking input on the other, which include some requests dating back to 2016.
Sources said that the Trump administration believes delaying some requests while approving others would be less of a shock for the multibillion dollar credit market.
Sources said that the White House will also force large refiners to make up the gallons exempted in a reallocation process. However, details are still being worked on.
Sources said that no final decision has been made on the path to take, and the details may change as the industries increase their engagement with the administration.
The White House refused to comment.
Molly Vaseliou (EPA spokesperson) said that there were multiple reports on how the administration intends to handle the exemptions with different conclusions. She called news reports "rumors" spread by people who want to influence the market for biofuel credits. She did not confirm nor deny any of the details reported.
Sources said that the U.S. Department of Energy, along with White House aide Stephen Miller, collaborates to make decisions on small refinery exclusions. However, this time, the White House Energy Dominance Council has played a leading role, highlighting its importance.
During the first Trump Administration, the EPA approved a significant number of exemptions, causing the price of renewable fuel credits to drop. This angered the Farm Belt who said that the exemptions were hurting a program which drove investment in Midwest.
The administration of ex-President Joe Biden was critical about the exemptions, and allowed the applications to linger without a decision. This resulted in a buildup.
The RFS allows refiners to purchase credits in order to comply with the RFS program. However, it gives them only two years to send the credits to the EPA. This complicates the administration's attempts to resolve the outstanding credits that have been accrued from 2016 to 2022 and are therefore worthless. (Reporting by Jarrett Renshaw, Stephanie Kelly and Nia Williams; Editing By Nia Williams).
(source: Reuters)
