By Jamie Martin
The administration has encouraged oil and biofuel producers to find common ground on the next phase of the U.S. Renewable Fuel Standard (RFS). This push aims to avoid past political tensions and foster policy stability.
The Renewable Fuel Standard mandates that biofuels like ethanol and biodiesel be blended into the U.S. fuel supply. For years, oil companies and biofuel producers have been at odds over blending volumes and refinery exemptions.
Under the new direction, industry representatives have already held bilateral discussions. A recent meeting hosted by the American Petroleum Institute (API) included key topics such as future blending mandates, refinery exemptions, and tax policies.
According to API’s Vice President Will Hupman, “It makes it easier for (the Trump administration) to arrive at whatever number they arrive at if they are hearing from groups that have historically been at the opposite sides of this.”
A tentative agreement was made to request the EPA to increase renewable diesel and biodiesel blending targets to 4.75 to 5.5 billion gallons, up from the current 3.35 billion. However, ethanol volumes are likely to stay at 15 billion gallons due to flat gasoline demand.
Small refinery exemptions remain a controversial point, with no consensus on whether larger refiners should compensate for waived blending obligations.
The future of the 45Z tax credit, introduced under the previous administration to reward lower carbon fuel producers, was also debated. Some supported returning to the $1-per-gallon blender’s credit, while others favoured the new model.
Although no final decisions were made, both industries agreed to continue discussions. According to Hupman, cooperation has grown as more oil companies invest in biofuels. “We have a realization that the RFS is here to stay and we want to make sure it functions as efficiently as intended,” he added.
Photo Credit: photo-credit-vista-mipan
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