Prices for credits used by refiners in the USA to show compliance with the country’s biofuel mandate tumbled after President Donald Trump’s administration ordered a freeze and review of 30 environmental regulations published before he assumed office, Bloomberg reported on 24 January.
A 20 January memorandum from Trump ordered the Environmental Protection Agency (EPA) to temporarily delay any regulations published in the Federal Register between 28 October-17 January, which includes the Renewable Fuel Standard (RFS) programme.
The Bloomberg report said Renewable Identification Numbers (RINs) tracking compliance with 2017 biofuel targets plummeted 23% to 46 cents/credit on 25 January.
A RIN is attached to each gallon of biofuel which a refiner blends, which it can keep to show adherence to biofuel mandates or trade it to another party.
The news comes as petroleum interests continue to resist using increasing volumes of biofuels in the USA.
In November, the Obama administration increased 2017 quotas, also known as Renewable Volume Obligations (RVOs) (see Biofuel News OFI January 2017).
The EPA also denied a request from oil refiners to waive some of their advanced biofuel use requirements, just days before Trump took office on 20 January.
In a 17 January letter to the American Fuel and Petrochemical Manufacturers (AFPM), the EPA said it was denying the group's request to waive some of the 2016 required volumes, Reuters reported.
The AFPM had said that total cellulosic production was below the total requirements targeted for 2016.
However, the EPA said that supplies were adequate based on last year's production and carryover stocks of compliance credits, adding that companies could also buy waiver credits as an alternative.
The question now is how Trump will deal with two of his conflicting support bases – Big Oil vs Big Corn.
The farming sector has lobbied hard for maximum biofuel volumes, which the oil industry opposes.
According to the Bloomberg report, the EPA’s memo shows that the latest biofuel targets were to take effect on 10 February.
The Renewable Fuels Association (RFA) said the standard for this year was effective on 1 January.
“This postponement of the effective date for the 2017 RVO rule is simply procedural,” RFA president Bob Dinneen said. “It is not expected to affect implementation, enforcement, or compliance with the RFS.”