The Trump management believes it can mitigate farmer anger over its biofuels policy by agreeing to make use of more partial waivers for oil refineries, indicating a potential solution to an extended battle between Big Corn and Big Oil, two vital political supporters in 2020 presidential election, according to three sources conversant in the matter.
The government has spent months trying to appease farmers and corn-based biofuel producers after it gave 31 oil refiners exemptions to blending mandates in August, triggering outrage across the Farm Belt. It revealed a proposal to address the issue in October that biofuel corporations say does not go far enough to pay for the ethanol demand destruction brought on by the waivers.
President Donald Trump has validated using partial exemptions as a solution to the problem going forward, one of the sources stated, instead of persistently issuing waivers that exempt refiners from 100% of their biofuel blending obligations. It’s unclear if the support for using partial exemptions can be made official through rule-making.
Under the U.S. Renewable Fuel Standard, refineries are obliged to blend 15 billion gallons of ethanol yearly. However, the EPA can exempt small plants that demonstrate compliance would hurt their business.
The EPA has around quadrupled the number of waivers it grants to grease refineries since Trump assumed office, something the EPA says is meant to protect blue-collar refinery jobs, however, which biofuels producers say is hampering ethanol demand.
EPA’s current plan for 2020 would address the increased number of exemptions by raising the amount some refineries should mix in 2020, based on a 3-year average of the volumes that the Division of Energy had advised the EPA waive under the exemption program.