President Trump resolved two persistent questions about biofuels on Tuesday, allowing the year-round sale of higher blends of ethanol in gasoline, which will benefit corn farmers, and saying he will consider whether ethanol exports should be counted as part of the government’s target for biofuels use, a step that would relieve pressure on oil refiners. During a meeting with senators, the president also shelved the oil industry request for a price cap on the credits, known as RINs, that refiners must buy if they don’t blend enough ethanol to satisfy the Renewable Fuel Standard.
The oil industry labeled the president’s actions as a “win-win solution” for refinery workers and for the ethanol industry. Trade groups for biofuels said Texas Sen. Ted Cruz promoted the change in rules on ethanol exports after losing the debate over a price cap on RINs.
“After several meetings and input from stakeholders on both sides, President Trump is pleased to announce that a final decision has been made that allows E15 to be sold year-round, while providing relief to refiners. This outcome will protect our hardworking farmers and refinery workers. The President is satisfied with the attention and care that all parties devoted to this issue,” said deputy White House press secretary Lindsay Walters.
Iowa Sen. Chuck Grassley said there was also “an agreement not to pursue an artificial cap on RIN prices, which would have destroyed demand for biofuels and hurt biofeuls workers.”
Scott Irwin, a University of Illinois economist, said the RFS was created to spur domestic use of biofeuls so logically, exports should not be part of RFS calculations. “We have written several times…that we think this would be knocked down quickly in a legal challenge for this reason,” he said on Twitter.
But the oil industry said, “Allowing RINs associated with exported biofuel to be used toward compliance would go along way toward addressing the burden of persistently high RIN costs on merchant refiners without hampering domestic biofuel consumption.” The Renewable Fuels Association said the proposal could result in lower domestic use of ethanol and trade retaliation by other countries against a subsidy on U.S. ethanol exports.