RFA: Trump to shift biofuel blending burden off refiners
(Reuters) -- The head of the Renewable Fuels Association said on Tuesday that US President Donald Trump's administration would lift the responsibility for fuel blending off refiners, which had long requested this change to the nation's biofuel program.
The news sent prices of compliance credits used to meet annual standards tumbling to as low as 30 cents apiece on Tuesday from 47 cents to 48 cents previously.
The Renewable Fuel Standard requires that fuel companies use increasing amounts of biofuel blended with gasoline and diesel.
Oil refiners, including Valero Energy Corp and CVR Energy Inc, had long sought the change, saying the biofuel program hits them with burdensome costs.
Renewable Fuels Association Chief Executive Officer Bob Dinneen said a Trump administration official told the trade group that a pending executive order would change "the point of obligation" from refiners to position holders at the terminal, the tweak sought by Valero and other merchant refiners.
"Despite our continued opposition to the move, we were told the executive order was not negotiable," Dinneen said.
The Environmental Protection Agency said in November that it planned to deny petitions from Valero, the American Fuel and Petrochemical Manufacturers, HollyFrontier Corp and Delta Air Lines' Monroe Energy but opened that decision up to a public comment period.
These merchant refiners have said they are being squeezed by annual government mandates that require increasing volumes of biofuels. To meet them, they have had to buy paper credits in an opaque market, spending hundreds of millions of dollars.
Other groups that represent integrated oil companies like the US units of Royal Dutch Shell Plc and BP Plc have opposed the change. Biofuel organizations and many other fuel retailer groups are also against it, saying it will complicate managing the program.
The decision was pushed into the new administration under Trump, a Republican who has said he wants to reduce regulations and has installed billionaire Carl Icahn as a special advisor on them.
Speculation has mounted that the EPA under Scott Pruitt would consider this change. Icahn, who owns a majority stake in CVR Energy, has been an outspoken critic of the Renewable Fuel Standard.
Reporting by Chris Prentice; Writing by Richard Valdmanis; Editing by Chizu Nomiyama and Lisa Von Ahn
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