US ups biofuel blend to end weeks of lobbying from oil industry

The US Environmental Protection Agency said on Thursday that refiners will have to blend slightly more biofuels in their transport fuels under the Renewable Fuel Standard for the next two years - a move that was hailed as a victory for the biofuel industry.

The ruling requires fuel companies to blend 19.29 billion gallons, slightly higher than the 2017 volume and higher than a proposal for 19.24 billion gallons released in July this year.

Of that, advanced biofuels should contribute 4.29 billion gallons of which 288 million gallons should be cellulosic biofuels and 2.1 billion gallons biomass-based diesel.

That leaves 15 billion gallons to be fulfilled by conventional biofuels, with the vast majority to come from corn-based ethanol.

The biofuels lobby broadly welcomed the rule.

“We applaud the administration for standing up against efforts to destabilize the Renewable Fuel Standard. The EPA’s on-time announcement upholds the statutory targets for conventional biofuels, which will provide much-needed certainty for hard-pressed rural communities,” said Emily Skor, CEO of Growth Energy.

Bob Dineen, president and CEO of the Renewable Fuels Association, said that maintaining the 15 billion gallon guarantee for conventional biofuels “will accelerate investments in the infrastructure necessary to distribute mid-level ethanol blends like E15 and E30, and flex fuels like E85.”

The announcement follows months of lobbying by the oil industry to persuade the EPA to lower the biofuels mandate, which would have impacted US corn demand at a time when global stocks are at a record high.

The American Petroleum Institute said the EPA was ‘forced to implement a broken ethanol mandate’ and raised concerns that higher petrol blends may cause issues for engines that are not able to handle biofuels.

Currently, the US retail network supports gasoline blends of 10% ethanol – known as E10, but the higher blends that the biofuel industry has sought, such as E15 or E85 are not widely available.

The measure provided some support to US corn and soybean oil demand, with something in the region of 40% of US corn and almost 30% of US soybean oil heading into the energy pool as a feedstock for biofuels production.

The standard ends a good couple of months for US biofuels producers, with the US department of commerce slapping punitive import taxes on biofuel imports from Argentina and Indonesia – a move that will effectively keep them out of US markets and could support domestic prices.