US sets biofuel blending mandates for 2022 and denies refiners waivers for exemptions

The volume mandates in the US, typically set ahead of time each year, were delayed because of the coronavirus pandemic. Reuters

The US Environmental Protection Agency on Friday issued biofuel blending mandates for 2022 and the prior two years — with this year's number below one proposed in December — while denying oil refiners waivers to be exempt from the requirements.

The EPA set biofuel blending mandates for 2022 at 20.63 billion gallons and retroactive volume mandates for 2021 at 18.84 billion gallons and for 2020 at 17.13 billion gallons.

Although it denied the oil refiners' exemption petitions, the agency said it would allow extra time for small refiners to meet their 2020 blending obligations.

The EPA in December proposed to set volumes for 2022 at 20.77 billion gallons, for 2021 at 18.52 billion gallons, and for 2020 at 17.13 billion gallons.

The volume mandates, typically set ahead of time each year, were delayed because of the fallout of the coronavirus pandemic, which severely reduced US energy demand.

“Together, these actions reflect the [US President Joe] Biden administration's commitment to reset and strengthen the RFS [US Renewable Fuel Standard], bolster our nation's energy security and support home-grown biofuel alternatives to oil for transportation fuel,” EPA representative Tim Carroll said.

The decision on the mandates has involved White House staff members, who have had to weigh how the policy could affect record-high gasoline prices, surging food costs and inflation, and Farm Belt constituents. Higher mandates can raise demand for corn and impose costs on fuel producers.

Under the RFS, oil refiners must blend billions of gallons of biofuels into the nation's fuel pool or buy credits from those that do. The credits, known as RINs, are used by oil refiners and importers to show compliance with mandates.

Small refiners can receive an exemption from the requirements if they can prove financial harm from the mandates.

The law has been a hotbed of controversy, typically pitting the powerful oil and corn lobbies against each other.

Friday's announcement was welcomed by biofuel advocates, as the EPA set volumes for conventional biofuels, which includes ethanol, at 15 billion gallons for 2022.

“While the previous administration sold out to Big Oil, President Biden is taking unprecedented steps to bolster markets for family farmers and drive economic growth in rural America,” said Democratic US congresswoman Cheri Bustos of Illinois.

The oil refining industry said the decision to set 2022 volumes that high threatens the viability of small refineries. Refiners have long said that the obligations are too pricey.

“It's clear that the biofuel thresholds are now unattainably high,” said Mike Smith, with the United Steelworkers union, which represents workers employed by the refining industry.

Reuters first reported the 2020-2022 biofuel volumes earlier on Friday.