The corn ethanol industry squabbled over a rumored White House overhaul of the Renewable Fuels Standard, which guarantees biofuels a share of the gasoline market and provides a market for more than a third of the U.S. corn crop. By the end of the day, however, the White House knocked down talk that it would allow year-round sales of a 15 percent blend of ethanol, a step up from the 10 percent blend that is now standard, and potentially a large expansion in ethanol sales.
“There is no ethanol executive order in the works,” said a White House spokeswoman. The announcement took the air out of a surge in corn and ethanol futures, said Agrimoney.
The purported change in regulations would have short-circuited the EPA’s role as the chief regulator of the RFS and it would have paired the adoption of year-round E15, a goal of ethanol makers, with a goal sought by oil refiners – to absolve them of responsibility for complying with RFS targets for biofuels consumption, set at 15 billion gallons this year. The refiners want to shift the so-called “point of obligation” to the operators of fuel terminals. EPA closed a comment period last week on a proposal to keep the point of obligation at the refinery level.
News agency Platts reported the Renewable Fuels Association, one of the two largest ethanol trade groups, said it “received a call from the Trump administration making it clear that moving the point of obligation … was inevitable” so it asked for asked for E15 to be available year-round. The RFA has opposed a change in the point of obligation.
The trade big ethanol group Growth Energy blasted the RFA for being part of “a backroom deal” with Carl Icahn, owner of a refining company and a White House special advisor. If the point of obligation is moved away from refiners, oil companies would have no incentive to comply with the RFS, it said.
The oil industry has opposed the so-called ethanol mandate for years and bitterly opposes the spread of E15, which now cannot be sold in the summer in many regions because it evaporates more easily than E10 and could impair air quality.