U.S. renewable fuel credits surge on report of EPA action
NEW YORK, (Reuters) - U.S. renewable fuel credits (D6) jumped by a nickel hitting 28 cents on a report that the Environmental Protection Agency may reallocate exempt ethanol gallons under its waiver program to other refiners, according to two traders.
The EPA is expected to make the announcement as part of the release on Friday of the agency’s annual biofuel blending mandates under the U.S. Renewable Fuel Standard (RFS), one source told Reuters. Others sources interviewed said they had heard the EPA was considering such a move but expressed skepticism they would move ahead with it as part of this rule.
Such a move would be welcomed by biofuel groups and supporters on Capitol Hill, who say the agency’s broad use of the small refinery waiver program has effectively lowered the nation’s 15 billion gallon ethanol blending mandate by some 1.5 billion gallons.
The RFS requires refiners to blend biofuels like ethanol into the fuel pool or buy compliance credits from those who do. Refineries with a capacity of less than 75,000 barrels-per-day can seek waivers from the program.
EPA spokesman Jahan Wilcox did not respond to a phone call and email seeking comment.
Refiners that do not qualify for or receive exemptions would be forced to make up the exempt volumes, a shift that face stiff opposition from many in the refining industry.
“Our view is reallocating volumes would obviously conflict with public and private statements on the issue,” said Frank Macchiarola, Group Director of Downstream and Industry Operations at the American Petroleum Institute.
Macchiarola said the move would be a breach of trust and add to the burden of the program on all the refiners that do not qualify for the exemptions.
Compliance credits have hit 5-year lows this year amid news of the waivers.
Reporting By Jarrett Renshaw Editing by Chizu Nomiyama
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