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President Trump Instructs EPA to Deny Retroactive (“Gap-Year”) SRE (Small-Refinery Exemption) Waiver Requests

September 10, 2020

Reuters writers Stephanie Kelly, Jeff Mason and Jarrett Renshaw reported on Tuesday that, “U.S. President Donald Trump has instructed that dozens of oil refiner requests for retroactive waivers from U.S. biofuel laws be denied amid concerns the issue could cut into his support in the Farm Belt, three sources familiar with the decision said.

Capehart, Tom, Michael McConnell, Olga Liefert, David Olson, Feed Outlook, FDS-20h, U.S. Department of Agriculture, Economic Research Service, August 14, 2020.

“The move, in the form of a direction to the Environmental Protection Agency, marks the end of an effort by the refining industry to come into compliance with a January court decision that said the Trump administration should not have given out some waivers in previous years.

National Weekly Ag Energy Round-Up. USDA Livestock, Poultry & Grain Market News. USDA- Agricultural Marketing Service (September 4, 2020).

“The waivers have been a battleground for the influential oil and corn lobbies, both major constituencies for Trump as he seeks re-election in November.”

The Reuters article explained that, “Under the U.S. Renewable Fuel Standard (RFS), oil refiners must blend billions of gallons of biofuels into their products, or buy credits from those that do. But refiners may also seek an exemption from those obligations if they prove the requirements would cause them financial harm.”

The Reuters writers noted that, “The Trump administration has quadrupled the number of exemptions have given out to refiners, causing outrage in farm states, such as Iowa.”

Tuesday’s article added that, “The biofuel industry welcomed the news. ‘Now, more than ever, our nation’s farmers and ethanol producers are counting on the RFS to provide market stability and certainty during an incredibly difficult and tumultuous time,’ said a coalition that included the Renewable Fuels Association and the National Corn Growers Association.”

Meanwhile, Bloomberg writers Jennifer A Dlouhy and Kim Chipman reported on Wednesday that,

Trump administration officials have told ethanol advocates the government will reject requests by refineries to be waived from renewable fuel-usage requirements — a bid to reinforce the president’s support in key swing states of Iowa, Wisconsin and Minnesota.

The Environmental Protection Agency could reject as many as 67 of those retroactive waiver requests as soon as this week, according to four people familiar with the matter who asked not to be named prior to an announcement.”

The Bloomberg writers explained that, “Refineries filed dozens of applications with the EPA seeking retroactive waivers from the biofuel-blending requirements dating back to 2011. The tactic followed a January federal court ruling that said the relief was limited to facilities that have consistently received exemptions.

“Federal law authorizes the EPA to grant the exemptions for small refineries that can prove they are facing a serious economic hardship complying with the biofuel-blending requirements.

Administration officials have not yet decided whether to reject a separate 28 pending requests tied to 2019 biofuel quotas, two of the people said.”

Source: Keith Good, Farm Policy News