US biofuel blending proposals coming in days, sources say

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E85 ethanol fuel is pumped into a vehicle at a gas station selling alternative fuels in Nevada, Iowa, December 6, 2007. REUTERS / Jason Reed

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NEW YORK, Dec. 2 (Reuters) – The U.S. administration plans to deliver in days the amount of biofuels oil refiners must put into their fuel mix this year and next, as it contacts lawmakers to discuss this decision, according to three sources familiar with the case said.

President Joe Biden’s administration has delayed decisions on the 2021 mix bonds by more than a year, and it missed a deadline to finalize the 2022 bonds this week.

The delays came as the COVID-19 pandemic hammered fuel demand and Democratic lawmakers focused on other legislation.

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Officials with the Environmental Protection Agency (EPA), which administers the warrants, declined to comment on the timeline.

The EPA has asked at least two U.S. Democratic Senate offices to expect a retroactive drop in volumes for 2020 and 2021 and a restore of volumes in 2022, according to one of the sources.

The petroleum and biofuels industries have asked the EPA to announce the proposals, saying the delays have created uncertainty for the market.

After Thursday’s news, prices for renewable fuel credits (D6s), known as RINs, fell more than 7% to $ 1.00 each from $ 1.08 each, traders said.

Merchant petroleum refiners and the biofuel industry have fought over demands for years. Refiners say warrants are too expensive, while ethanol producers and corn growers love warrants because they have helped create a multibillion-gallon market for their products.

Reuters previously reported that the administration was considering drastically reducing blending requirements, a move that would anger the biofuels industry. Read more

The EPA would reduce mixing mandates for 2020 and 2021 to about 17.1 billion gallons and 18.6 billion gallons, respectively, Reuters reported, from the 20.1 billion gallons finalized for 2020 before the pandemic.

The agency would also set the level for 2022 at around 20.8 billion gallons, Reuters reported.

The EPA has not commented on these levels at the time of publication.

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Reporting by Stephanie Kelly and Jarrett Renshaw; Editing by Edmund Blair, Mark Potter, Mark Porter and Richard Chang

Our standards: Thomson Reuters Trust Principles.


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