News ID: 238751
Published: 0953 GMT February 12, 2019

EPA may issue E15 gasoline plan without biofuel credit trade limits

EPA may issue E15 gasoline plan without biofuel credit trade limits
REUTERS

The US Environmental Protection Agency (EPA) is considering releasing its draft proposal to expand sales of higher ethanol blends of gasoline without including simultaneous measures it promised the oil industry to curb biofuel credit speculation, according to three sources familiar with the matter.

The move would help the agency lift a summertime ban on sales of so-called E15 gasoline in time for the US driving season, but is likely to anger oil refiners that had been asking the US President Donald Trump administration for biofuel credit market reforms to reduce their costs, Reuters reported.

If EPA passed on introducing biofuel credit trading limits, it would leave the door open to potential speculative price surges that could cost refiners like Valero Energy Corp hundreds of millions of dollars. Trump announced in October he was directing the EPA to allow year-round sales of E15, in a win for the powerful corn industry which supplies ethanol. E15 gasoline contains 15 percent ethanol, versus the 10 percent found in most US gasoline.

The ban had been imposed over concerns that E15 contributes to smog in hot weather.

EPA spokesman Michael Abboud declined to comment.

The EPA had initially planned to combine credit trading limits into the E15 rule as a concession to the oil industry, which says speculation increases the price of biofuel credits it must purchase to comply with federal law.

Under the US Renewable Fuels Standard oil refiners have to blend increasing volumes of biofuels into the nation’s gasoline and diesel each year, or purchase credits — called Renewable Identification Numbers (RIN) — from those who do.

The combined draft proposal was scheduled for release this month, and was meant to be finalized and implemented by June.

“The EPA has been seriously looking at dropping the RIN reform to speed up the process on E15,” one industry source with knowledge of the matter said.

One other source said that the EPA had already decided to delay the credit trading limits.

“They separated the RIN reform to ensure that the (E15) rule would get done in a timely manner,” the source said.

The sources asked not to be named discussing the matter.

The agency is still working to release its draft rule for E15 by the end of the month, possibly within days, and is planning to expedite the rule-making process to finish it by June when seasonal driving demand picks up.

   
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