Environmental Protection Agency (EPA) Administrator Scott Pruitt laid out a major focus for the Trump administration when it comes to the federal law mandating biofuels be blended into the fuel supply.
Pruitt said EPA should use “objective factors” to set the amount of biofuels refiners must legally blend into the U.S. fuel supply, suggesting the current methods drives up the price of Renewable Identification Numbers, or RINs, which makes compliance more expensive.
“RIN reform is very, very important,” Pruitt told Fox Business host Stuart Varney on Thursday morning.
— FOX Business (@FoxBusiness) February 1, 2018
Refiners bear the cost of compliance, meaning they have to purchase RINs when they don’t blend biofuels into fuel. The current method of setting biofuel blending levels can drive up RIN prices.
Compliance costs can be steep. Philadelphia Energy Solutions’s, the largest East Coast refiner, recent bankruptcy filing partly blamed its $800 million tab to comply with the biofuels mandate.
Pruitt’s remarks are sure to stir up the biofuels industry, which successfully derailed small reforms EPA proposed to the federal biofuels mandate, called the Renewable Fuel Standard, last year.
Many in the GOP have pushed for RIN reform for years, as has the oil and gas industry and conservative groups. But all efforts to reform the federal biofuels mandate have been stopped cold by Corn Belt politicians and lobbyists.
Environmental and anti-hunger groups also joined efforts to reform the biofuels mandate, arguing it drives up the cost of food and degrades the environment.
While Pruitt said reforming RINs was an important venture, it’s unclear how much effort EPA will put into it.
EPA proposed some small changes to the biofuels mandate last year, but had to abandon the effort after Midwestern Republicans personally appealed to the White House.
Later that year, EPA walked a fine line when it issued biofuel blending obligations for 2018, setting the mandate at a level that satisfied neither refiners nor the biofuels industry.
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