US EPA to seek comment on potential blending waiver for refiners

NEW YORK: The US Environmental Protection Agency is expected to seek comment on Friday on a potential general waiver that would exempt oil refiners from their biofuel blending obligations, two sources familiar with the matter said.

The move could open the door to a contentious debate between the oil and biofuel industries as President Donald Trump leaves office. EPA is also expected to propose a rule on labeling and infrastructure for gasoline with higher ethanol blends.

Under US law, refiners have to blend billions of gallons of biofuels into their fuel mix or buy tradable credits from those that do. Refiners can apply for exemptions if they can prove the requirements would do them financial harm.

The exemptions have been a lightning rod of controversy for the oil and biofuel industries. Biofuel advocates say the waivers hurt demand for their product, but the oil industry rejects that claim and says the exemptions are necessary to keep small refiners afloat.

In a recent document, EPA signaled it would not decide on a slew of pending waiver requests submitted by the industry because of pending litigation, Reuters reported on Thursday.

In the same document, the agency said it is also proposing to extend the compliance deadline for 2019 biofuel blending obligations to Nov. 30, 2021, and an associated deadline for submission of attest engagement reports to June 1, 2022. The EPA is also proposing to extend the 2020 deadlines to Jan. 31, 2022, and June 1, 2022.

Friday's expected announcement follows a year of suppressed demand and weak margins for oil refiners and ethanol producers because of the coronavirus pandemic.

Politicians previously have asked the Trump administration for a nationwide waiver in an effort to help oil refiners during the pandemic.