Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

U.S. EPA proposes biofuel mandate cuts, a boost to pandemic-hit refiners

CommoditiesDec 07, 2021 05:55PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters. FILE PHOTO: E85 ethanol fuel is shown being pumped into a vehicle at a gas station selling alternative fuels in the town of Nevada, Iowa, December 6, 2007. REUTERS/Jason Reed

By Stephanie Kelly and Jarrett Renshaw

NEW YORK (Reuters) - The Biden administration on Tuesday proposed scaling back the amount of biofuels that U.S. oil refiners were required to blend into their fuel mix since the onset of the COVID-19 pandemic.

The decision was intended to provide relief to the U.S. refining industry after the health crisis slammed domestic demand for transport fuels.

But the proposal drew criticism from both the oil industry, which claimed the measures were not enough, and the biofuels sector, which said the retroactive move to cut blending volume mandates would hurt farmers.

"This decision is an about-face by President Joe Biden who campaigned on his supposed support for renewable fuels,” said Republican Senator Joni Ernst of Iowa, a major corn and ethanol producing state.

She said the announcement will "slash demand for biofuels and have devastating, long-lasting consequences for Iowa farmers and producers."

The American Petroleum Institute, which represents the U.S. oil industry, said the administration "would best serve the public interest by keeping compliance volumes feasible" and said it was studying the proposals.

In Biden's first major biofuels policy decision, the U.S. Environmental Protection Agency (EPA), which administers the policy, proposed retroactively to set total renewable fuel volumes at 17.13 billion gallons for 2020. That was down from a previously finalized rule for the year of 20.09 billion gallons, set before the coronavirus hit.

It set volumes at 18.52 billion gallons for 2021 and 20.77 billion gallons for 2022. [nW1N2R904O]

Both the 2020 and 2021 figures mark a reduction from 2019, when the EPA had required refiners to blend 19.92 billion gallons of biofuels in the nation's fuel mix, but the 2022 proposal marks an increase.

The EPA also proposed a rejection of 65 pending applications for small refinery exemptions - waivers requested by fuel producers seeking to be excused from blending mandates for financial reasons. The action, which is not final, follows a court decision that narrowed the situations in which the agency can grant exemptions.

Former President Donald Trump's EPA had dramatically increased such waivers to refiners, angering biofuel producers.

In a concession to the biofuel industry, the U.S. Department of Agriculture, in tandem with the EPA's announcement, announced $700 million in grants to biofuel producers as COVID-19 relief and another $100 million in support for biofuel infrastructure.

Scott Irwin, an agriculture economist, said the move to lower mandates for 2020 and 2021 would likely trigger lawsuits from angry biofuel producers.

Some biofuel producer organizations said they were pleased the EPA had proposed increased volumes for 2022.


Under the U.S. Renewable Fuel Standard (RFS), refiners must blend billions of gallons of biofuels - mostly corn-based ethanol - into the fuel mix, or buy credits, known as RINs, from those that do. Big Oil and Big Corn have sparred over requirements of the policy since its inception more than a decade ago.

Merchant oil refiners say the mandates are too costly, while ethanol producers and corn farmers like the mandates which helped to create a multibillion-gallon market for their products.

On the campaign trail and in office, Biden gave repeated promises to support rural, clean energy jobs and uphold the RFS.

The White House had since come under intense pressure from merchant refiners – including a plant in Biden's home state of Delaware – to take actions that lower the costs of the credits and help stave off threatened plant closures in the wake of the coronavirus pandemic that slashed gasoline demand.

Reuters, citing sources, previously reported that the Biden administration was considering big cuts to the blending requirements.

The price of RINs traded at 80 cents each Tuesday, the lowest in nearly a year, before recovering to 95 cents in the afternoon. RINs had set a record at $2 in May on concerns the refining industry would fail to generate enough of the credits to meet the regulatory mandates.

Earlier this year, merchant refiners such as PBF Energy (NYSE:PBF) Inc and CVR Energy (NYSE:CVI) Inc began building up massive outstanding liabilities in the credits, taking bets that Biden would ultimately side with refiners and roll back RFS mandates, Reuters previously reported.

U.S. EPA proposes biofuel mandate cuts, a boost to pandemic-hit refiners

Related Articles

Gold Rises 2% on Week; First Weekly Win in Five
Gold Rises 2% on Week; First Weekly Win in Five By - May 20, 2022

By Barani Krishnan -- Gold prices rose 2% on the week to give longs in the game their first weekly win in five. While they may have secured a break from their gloom...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Alan Rice
Alan Rice Dec 07, 2021 7:43PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Biofuels: Accelerating the decline of human civilization. (Burning food, NOT "goooooood".)
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
Sign up with Email