The Trump administration has urged oil and biofuel producers to reach a compromise on the future of U.S. biofuel policy in an effort to avoid political conflict during his first term, Reuters reports.
The oil industry and biofuel producers have long competed for billions of dollars worth of U.S. gasoline market share and have often clashed over the Renewable Fuel Standard (RFS), a federal program that requires billions of gallons of ethanol and other biofuels to be blended into the nation’s fuel supply.
At least two meetings have been held at the direction of the White House, including one last week hosted by the American Petroleum Institute (API).
Attendees included Will Hupman, API’s vice president of downstream policy, and the meetings discussed key issues such as future biofuel blending requirements, small refinery exemptions, and biofuel tax policy.
Any agreement between the two industries could affect the Trump administration’s future approach to biofuels policy.
Discussions have ranged from 4.75 billion to 5.5 billion gallons, with some parties wanting to reach higher production by 2026 and others pushing for more gradual growth, three sources said. Blending regulations for ethanol are capped at 15 billion gallons, and the parties see limited prospects for growth as gasoline demand levels off, the sources said.
The parties are divided over RFS exemptions for small refineries, one of the most contentious issues, the sources said. In Trump’s first administration, the EPA granted a record number of such waivers to allow small refineries to circumvent blending obligations and sparked strong opposition from Republican allies in the farm belt, who said the move was punishing farmers.
