Tag Archives: biofuels

Exclusive-Farm Belt lawmakers push for biofuel investment and tax credits in new bills

By Jarrett Renshaw

(Reuters) – Billions of dollars in federal investments and tax credits to boost demand for U.S. biofuels will be part of two bills that Democratic lawmakers will introduce to the U.S. Congress, two sources familiar with the plans said.

Congress members from rural states will introduce bills in coming weeks seeking federal funds to add more high-biofuel blend pumps at retail stations and tax credits for automakers that put more “flex-fuel” vehicles on the road.

President Joe Biden was expected to give an update on Monday on whether the White House will accept a pared-down infrastructure bill negotiated by bipartisan group of lawmakers. If that happens, the sources said, the biofuels bills could be rolled into a massive spending bill with economic priorities Biden omitted from the infrastructure talks. Democrats and the White House hope the spending bill will pass along party lines this fall in a process called reconciliation.

The biofuels industry, including Archer Daniels Midland and Renewable Energy Group among others, is under pressure as the administration mulls cutting biofuel mandates to help U.S. oil refiners deal with rising regulatory costs.

Farm Belt Democrats including Senator Amy Klobuchar of Minnesota and Representatives Cheri Bustos of Illinois and Cindy Axne of Iowa are leading the charge to support biofuels, sources said. These lawmakers often chide their party for paying too little attention to rural communities.

The lawmakers plan to seek $2 billion in funding to pay for new fuel pumps and other infrastructure for providing higher biofuel blends like ethanol and biodiesel. They are seeking a 5-cent-per-gallon tax credit for gas stations offering so-called E15, which is gasoline that contains 15% ethanol.

They also are seeking a $200 per car tax credit for automakers that make “flex fuel” vehicles that can run on virtually any blend of gasoline or ethanol.

Slim majorities in the House and Senate will embolden Democratic lawmakers to fight for pet projects and regional demands, in exchange for supporting the major spending plan. Congressional aides and White House officials have warned that those regional and special interests could swell the spending bill and complicate efforts to move ahead on a party-line vote.

BIDEN’S COMPETING PRIORITIES

While farm states want the White House to help the biofuels industry, labor groups and another group of Democratic senators have a competing demand for helping lower costs for refiners. The U.S. Renewable Fuel Standard requires refiners to blend biofuels like ethanol into fuel or buy tradable credits from competitors who do.

The U.S Environmental Protection Agency is weighing a nationwide general waiver exempting U.S. refiners from some obligations. This would lower the amount of renewable fuel refiners must blend in the future and create a price cap on compliance credits.

Another priority for Biden has been boosting electric vehicles. He included $174 billion to pay for charging stations in his ‘American Jobs Plan’ introduced in March.

Electric vehicles are key to Biden’s drive to get the United States to net-zero carbon emissions by 2050. Environmental groups may see biofuel investments as counter to those goals.

“Investments into our electric vehicle system are necessary and good, but liquid fuel is not going to disappear overnight,” Bustos told Reuters. She acknowledged her support for the biofuels market but did not share any bill details.

“The way we look at is biofuels have the potential to drive down our carbon emissions now, not 10 years from now, not by 2050, but right now,” Bustos said.

(Reporting By Jarrett Renshaw; Editing by Heather Timmons and David Gregorio)

Trump administration weighs high-ethanol fuel waiver to placate farmers

A gas pump selling E15, a gasoline with 15 percent of ethanol, is seen in Mason City, Iowa, United States, May 18, 2015. REUTERS/Jim Young

By Jarrett Renshaw and Chris Prentice

NEW YORK (Reuters) – The Trump administration is considering allowing the sale of a higher ethanol fuel blend in the summer, a source familiar with the issue said, a move that would placate corn growers worried about the future of U.S. biofuels policy.

President Donald Trump recently met with the heads of the Environmental Protection Agency and the U.S. Department of Agriculture to discuss ways to make the Renewable Fuel Standard less expensive to the oil industry without undercutting demand for ethanol.

The RFS requires refiners to add increasing volumes of biofuels like corn-based ethanol into the nation’s fuel supply each year. That is a boon to farmers but a headache for refining companies, which must either blend the fuels themselves or purchase credits from those who do.

Over the past several months, Trump has unsuccessfully tried to broker a deal between “Big Oil” and “Big Corn” over the issue, and has faced mounting pressure from lawmakers in the Midwest, who are concerned that he will weaken domestic demand for ethanol at a time farmers are potentially facing a trade war with China that could hurt export demand for corn and soybeans.

Sources had told Reuters this week that Trump was temporarily suspending his consideration of a refining industry-backed proposal to cap prices for blending credits, an idea that the biofuels industry has opposed as damaging to farmers.

But in the meantime, the administration is considering moving forward with plans to allow for the ethanol industry’s long sought waiver to sell gasoline containing 15 percent ethanol in the summer, instead of the usual 10 percent blend, the source familiar with the issue told Reuters on Wednesday.

The higher ethanol blend, called E15, is currently banned by the Environmental Protection Agency because of concerns it contributes to smog on hot days, a worry that biofuels advocates say is baseless.

“EPA has been assessing the legal validity of granting an E15 waiver since last summer,” said EPA spokeswoman Liz Bowman in an emailed statement, noting the agency is awaiting an outcome from discussions with the White House, the USDA and Congress before making any final decisions or preparing regulatory actions.

White House spokeswoman Kelly Love did not comment on the E15 waiver but said that during Trump’s meeting Monday he “instructed his cabinet to continue to explore options that protect American farmers and America’s refinery workers.”

Biofuels proponents have heaped pressure on the White House after reports that the EPA was granting dozens of small refineries exemptions from the RFS to help them avoid the costs of compliance, something the ethanol industry says will weaken demand for their product.

On Monday, Trump acknowledged farmers may bear the brunt of the economic harm if China retaliates against Washington’s threat of tariffs, adding that “we’ll make it up to them.” Many U.S. farmers are battling debt after years of excess global supplies and depressed prices.

“We need some good news out here,” said Monte Shaw, executive director of the Iowa Renewable Fuels Association.

“The best news (Trump) could give us right now is year-round sales of E15,” he said.

(Reporting by Chris Prentice and Jarrett Renshaw; Editing by Steve Orlofsky)