A US Environmental Protection Agency announcement planned for Friday about proposed annual biofuel blending mandates under the Renewable Fuel Standard appears indefinitely delayed due to growing opposition to the EPA's reported intent to reallocate blending obligations waived for some small refiners, sources said Thursday.
"They either underestimated or didn't take into account the reaction they would get from [the reallocation plan]," one industry lobbyist said.
An EPA spokeswoman did not immediately respond to a request for comment.
On Wednesday, D6 ethanol Renewable Identification Numbers for 2018 compliance rose 4 cents to an S&P Global Platts assessed level of 27 cents/RIN on reports that EPA planned to reallocate biofuel blending obligations under waivers exempting small refineries from the mandate which have cut biofuel blending by an estimated more than 1 billion gallons.
Ethanol credits fell to a five-year low of 18.25 cents/RIN on June 4. On Thursday, 2018 D6 ethanol RINs were heard trading at 32 cents/RIN.
One industry source said the EPA planned to structure its planned reallocation by prorating blending obligations waived this year to next year's proposed volumes.
"It essentially punishes parties that are able to comply with the law," this source said.
Under the RFS, the EPA is due to release the next year's finalized mandates by November 30. Delaying the proposal may push the finalized mandates beyond the statutory deadline.
EPA Administrator Scott Pruitt has faced criticism from farm-state members of congress for months over his handing of the RFS, which requires refineries to blend increasing amounts of biofuel into gasoline and diesel.
In a letter sent to Pruitt Wednesday, a dozen farm-state House members criticized his "misuse" small refinery waivers by granting them to an "unusually large" number of refineries.
"It is difficult to believe that 13 years into the RFS program, with an economy that is clearly benefiting the oil and refining sectors, that there could be such a dramatic increase in the number of small refineries suffering 'disproportionate economic hardship' - especially those that are part of large, integrated firms," the House members wrote.
