Washington | Reuters — A coalition of oil and biofuel groups will meet with the U.S. Environmental Protection Agency on Tuesday to make the case for higher federal mandates for biomass diesel blending, according to three sources familiar with the plans.
The EPA meeting signals that the agency may be closer to releasing fresh biofuel blending quotas for the Renewable Fuel Standard (RFS) for at least the next two years, a first test of President Donald Trump’s promised support of the biofuel industry.
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Why it matters: The rise and fall of the American biofuel market can affect Canadian farmers’ crop marketing prospects
Big Oil and the Farm Belt’s biofuels makers are traditional competitors for share in the multibillion-dollar U.S. gasoline market, but they have come together to form a consensus at the request of the White House in recent months in hopes of avoiding the type of clashes that defined the first Trump administration.
The coalition is likely to push for biomass diesel mandates in the range of 5.5 billion to 5.75 billion, according to a coalition document viewed by Reuters. That is up from its current level of 3.35 billion gallons, which the biofuel industry says is far below production capacity.
The coalition has settled on a corn-based ethanol blending mandate at 15 billion gallons, despite a push by some who wanted to see 15.25 billion gallons, according to two sources familiar with the discussions.
The EPA did not respond to requests for comment.
The coalition, led by the American Petroleum Institute (API), is showing some signs of splintering, however, ahead of Tuesday’s meeting.
A group of truck stop operators and fuel retailers involved in the effort is boycotting the meeting after a dispute over whether they could voice concerns about raising biomass diesel quotas without restoring a blenders tax credit that expired in December.
The splinter group says the blenders tax credit helped keep prices down for consumers, and its replacement – a producer tax credit known as 45Z- is incomplete and has been proven ineffective.
“This will not only hurt Americans’ financial standing, it will also create exceedingly difficult political challenges for the Agency and the White House,” the splinter group said in a letter to EPA administrator Lee Zeldin on Tuesday.
