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US Biofuels Policy Overhaul Faces Major Challenges

US Biofuels Policy Overhaul Faces Major Challenges”

USA senators on both sides of the Renewable Fuel Standard debate return to the White House on Tuesday to discuss ideas for reforming the biofuel mandate, but they are not expected to reach a deal that resolves the increasingly heated issue.

The meeting that President Trump has called, scheduled for Tuesday, will reportedly include Republican Senators Ted Cruz of Texas, and Chuck Grassley and Joni Ernst of Iowa.

Grassley and Ernst said there appears to be disagreement in the Trump administration about the idea of allowing exports to count as credit toward meeting the RFS volume requirements, which appear to be an element of the talks.

However, a major overhaul of the current policies on blending corn-based ethanol and other biofuels into gasoline and diesel faces opposition from both lobbies-for different reasons-and is pitting lawmakers from the big oil states against those of the Midwest farm belt.

"We've got one refinery in trouble and driving the whole thing to ruin the ethanol industry", Mr. Grassley told reporters on a conference call following the meeting. "The reality is, most refiners are reporting double-digit profit increases".

The joint letter to Trump asks him to compare the struggling agriculture industry with the "booming" oil and gas industry when making his decision on RFS.

"Today's bankruptcy filing by Philadelphia Energy Solutions (PES) is a result of the counterproductive, job-killing, EPA-imposed Renewable Fuel Standard (RFS) that requires an excessive amount of biofuel be blended into the nation's fuel supply", Senator Pat Toomey (R-Pa.) said in January, commenting on PES's hardships.

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Earlier this week it was reported that Trump would be meeting with various agency heads to discuss possible changes to the biofuel mandate.

The current biofuels policies have always been the bone of contention between oil and corn states, but they recently took center stage again after Pennsylvania-based oil refiner Philadelphia Energy Solutions (PES) filed for bankruptcy protection in late January, blaming part of its financial hardships on the compliance costs with the RFS and the purchase of tradeable blending credits known as Renewable Identification Numbers, or RINs.

Whatever the solution turns out to be, senators say, officials in the White House don't seem to be in total agreement about how they want to move forward. This represents a 50% decline in net farm income since 2013.

Northey was swiftly confirmed on a voice vote at about the same time as the meeting was taking place. He could order EPA to approve year-round sale of the E15 ethanol blend and bring more transparency to the RIN market.

Monte Shaw, executive director of the Iowa Renewable Fuels Association, said Tuesday that he believes Cruz is pushing a waiver that would "gut" biofuels demand. Northey will be the new undersecretary for Farm Production and Conservation at the USDA.

One development out of Tuesday's meeting was that Cruz released his months-long hold on Iowa Agriculture Secretary Bill Northey's nomination to take a top post at the U.S. Department of Agriculture.



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