November 29, 2018 / 7:13 PM / 19 days ago

RPT-EXCLUSIVE-EPA lifts advanced biofuel mandate for 2019, keeps ethanol steady -document

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    By Humeyra Pamuk
    WASHINGTON, Nov 29 (Reuters) - The U.S. Environmental
Protection Agency lifted its annual blending mandate for
advanced biofuels by 15 percent for 2019, while keeping the
requirement for conventional biofuels like corn-based ethanol
steady, according to an agency document seen by Reuters on
Thursday.
    The mandate includes 4.92 billion gallons for advanced
biofuels which can be made from plant and animal waste, a figure
that is up from the EPA's initial proposal in June of 4.88
billion and above the 4.29 billion that had been set for 2018,
according to the document. 
    The requirement for conventional biofuels, meanwhile,
remains at 15 billion gallons for 2019, on par with 2018, and
the same as proposed by the agency in June.
    The EPA is required to formally announce the biofuel mandate
figures, which are closely watched by the rival corn and oil
industries, by Friday.
    Under the U.S. Renewable Fuel Standard, first adopted in
2005, oil refiners are required to blend a certain amount of
biofuels, as determined by the EPA, into their fuel each year or
purchase blending credits from those that do. 
    The policy has helped farmers by creating a huge market for
ethanol and other biofuels, but oil refiners say that complying
can cost them a fortune. 
    The new figures confirm the agency has declined requests by
the corn industry to reallocate biofuel blending obligations
previously waived under the small refinery exemptions program,
which has been expanded dramatically under the administration of
President Donald Trump.
    Small refineries can be exempted from the RFS if they prove
that complying would cause them financial strain.
    The powerful corn lobby and top officials in the U.S.
Department of Agriculture have complained for months that the
expansion of the waiver program since Trump took office
threatens demand for ethanol.
    An EPA official told Reuters earlier this week the decision
not to reallocate waived volumes was due mainly to timing.
    "The primary reason why we’re not reallocating in this rule
is because we have no idea what the volume of SREs (Small
Refinery Exemptions) will be for calendar 2019 and we won’t know
that late 2019, early 2020. All we could do is guess, and we
don’t do regulations by guessing here," the official said.
    The Trump administration has also temporarily put on hold
processing of current waiver applications as the EPA and the
Department of Energy review the scoring system used to evaluate
them, sources familiar with the matter told Reuters. 
    EPA is still expected to rule on current applications,
however, before the March 31 compliance deadline for the 2018
calendar year.
    Trump has sought to please the corn lobby with a different
tweak to U.S. biofuel policy: in October he directed the EPA to
draft a rule allowing year-round sales of higher ethanol
gasoline blends called E15 - a product restricted during the
summer over concerns it contributes to smog.
    In an interview with Reuters, Bill Wehrum, assistant
administrator at EPA's Air and Radiation Department, said the
agency was on track to finalise the rule before June 1, in time
for 2019 driving season.
    "We will get it by done," Wehrum said, adding that they were
prepared to be sued over the rule. "I think there's a virtual
certainty that we're going to get challenged in court. I think
we gave a good legal argument," he added.
     Below is a table showing the EPA's new biofuels volumes
mandates:    
                                  2017   2018   2019   2020
 Cellulosic biofuel (million      311    288    418    n/a
 gallons)                                              
 Biomass-based diesel (billion    2.0    2.1    2.1    2.43
 gallons)                                              
 Advanced biofuel (billion        4.28   4.29   4.92   n/a
 gallons)                                              
 Renewable fuel (billion          19.28  19.29  19.92  n/a
 gallons)                                              
 
 (Reporting by Humeyra Pamuk; Editing by David Gregorio and
Richard Valdmanis)
  
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