By Stephanie Kelly
NEW YORK (Reuters) – The U.S. Environmental Protection Agency is expected to release on Friday retroactive mandates for the volume of biofuels oil refiners were required to blend into their fuel for the years 2020 through 2022.
The mandates, typically set ahead of time each year, were delayed due to the fallout of the coronavirus pandemic which severely reduced U.S. energy demand.
Reuters reported earlier this week that the EPA is likely to raise ethanol blending mandates for 2021 above a figure it proposed in December to align with actual U.S. consumption levels.
The mandates for 2020 and 2022 are expected to be within range of the December proposals.
The decision on the mandates involved White House staff, who have had to weigh how the policy could affect record-high gasoline prices, surging food costs and inflation, and Farm Belt constituents. Higher mandates can raise demand for corn and impose costs on fuel producers.
Under the U.S. Renewable Fuel Standard (RFS), oil refiners must blend billions of gallons of biofuels into the nation’s fuel pool, or buy credits from those that do. Small refiners can receive an exemption from the requirements if they can prove financial harm from the mandates.
The law has been a hotbed of controversy, typically pitting the powerful oil and corn lobbies against each other.
The EPA in December proposed rejecting numerous pending applications for small refinery exemptions, following a court decision that narrowed the situations in which the agency can grant them.
As a response to the likely denials, the EPA is expected to release a proposed rule that would extend RFS compliance for small refiners for the years 2019, 2020 and 2021, Reuters reported on Wednesday, citing sources.
It is unclear whether that proposal will also be released Friday.
(Reporting by Stephanie Kelly; Editing by Marguerita Choy)
