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(Bloomberg) — A council of US lawmakers has updated proposed biofuels guidelines in an effort to break an impasse that has deeply divided agriculture and oil groups.
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Both industries have clashed over biofuel policies, seeking to broker a deal with lawmakers to allow higher-ethanol E15 gasoline to be sold year-round nationwide, which would boost profits for farmers. The deal has been held up as the refinery sector argues over who should qualify for exemptions from using biofuels, which are huge expenses for refiners.
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The congressional council’s latest plan — in addition to allowing year-round nationwide sales of E15 — raises the amount of exemptions allowable on blending mandates, according to people with knowledge of the proposal.
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Under the current waiver program, each gallon of ethanol or biodiesel mixed into transportation fuels generates credits — so-called renewable identification numbers, or RINs — that oil refiners use to meet their federal blending obligations.
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The tweaked plan would limit exemptions on obligations for small refineries to 550 million RINs per year, the people said. That’s 100 RINs per year higher than the original proposal, in a nod to small and mid-sized refiners who said the limit was too small.
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It’s only the latest in these negotiations, which are being closely watched by the industries as well as by lawmakers from energy and agriculture states. The proposal is expected to be attached to must-pass legislation, though it’s unclear whether the draft will move forward as is. Mid-size and small refiners may still see the deal as not providing enough room for exemptions.
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The council has been recently formed. When a measure allowing year-round sales of E15 was killed last month, House Republican leaders struck an agreement with Midwestern GOP lawmakers to form the E-15 Rural Domestic Energy Council, with the goal of reaching a compromise between the agriculture industry and small, medium and large refineries.
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The council has released a discussion draft and is having “productive meetings as they work towards a final product,” said Alexandra Hamel, a spokesperson for council co-chair Randy Feenstra.
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The wrangling over the proposal comes as the industries have also been anxiously awaiting the Trump administration’s finalization of blending quotas. That has been delayed, leaving uncertainty over how companies will be impacted.
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