The US Environmental Protection Agency (EPA) is expected to extend the period of annual biofuel blending mandates from one year to three, according to three sources familiar with the discussions quoted by Reuters.
Switching to a multi-year target would be aimed at providing longer-term certainty to the refining and biofuels industries, the 2 September report said.
The sector has been given annual mandates for more than a decade under the US Renewable Fuel Standard (RFS).
“They're trying to put together a proposal for 2023, 2024 and 2025 where once they put the proposals together, then they don’t have to go back in and they don’t have to change and modify the volumes," one of the sources, who requested anonymity to speak openly about the discussions, was quoted as saying.
The EPA had been ordered to propose a rulemaking for 2023 mandates by 16 November, according to a legal document in July, Reuters wrote.
The EPA, which administers the RFS, had declined to comment for this article, Reuters said.
Under the RFS, oil refiners must blend billions of gallons of biofuels into the USA’s fuel mix, or buy tradeable credits known as RINs from other sources that do, Reuters wrote, in a bid to reduce energy imports, help farmers, and cut greenhouse gas emissions.
While Congress had set out specific goals until 2022, the law had expanded the EPA’s authority to change the way the RFS was administered, the report said, and from next year the agency could set multi-year mandates and make other changes.
In an earlier report, sources had told Reuters that the EPA was looking at ways to use the RFS to support electric vehicles, sustainable aviation fuel and hydrogen, although the organisation had not given details.
Although the oil and corn sectors welcomed multi-year mandates to increase certainty, there were concerns that the shift could unintentionally distort markets if long-term mandates either over or under-estimated actual demand, the report said.