US senators introduce bill to remove ethanol mandate

Market: Biofuels
20/07/21

US senators on both sides of the aisle today introduced a bill to remove the ethanol biofuel mandate from the Renewable Fuel Standard (RFS).

Senators Susan Collins (R), Dianne Feinstein (D), Bob Menendez (D) and Pat Toomey (R) submitted the Corn Ethanol Mandate Elimination Act. If passed, the bill would terminate the corn ethanol component of the RFS.

Senators sponsoring the bill said removing the corn ethanol mandate would incentivize development of more advanced biofuels.

"Corn ethanol achieves little to no reductions in greenhouse gas emissions. It's time to end the mandate and instead support more advanced biofuels and biodiesel," wrote senator Feinstein.

Under the RFS, obligated parties such as fuel refiners and importers must blend billions of gallons worth of biofuels with road fuels each year. In 2020, statutory volumes for total biofuels blended was 30mn USG. Actual volumes finalized by the US Environmental Protection Agency (EPA) were nearly a third lower at 20.09bn USG. Of those gallons, less than half of them were mandated as advanced biofuels.

Obligated parties often meet their minimum obligations for advanced biofuels and then cover the balance of their total renewable fuel obligation with cheaper RIN credits such as D6 ethanol RINs. The RFS volumetrically capped ethanol blending at 15bn USG in 2015. The ethanol blend rate into motor gasoline has averaged nearly 9.9pc so far this year. When ethanol RINs are tight because of low blending or aggressive blending targets, obligated parties will sometimes opt for covering that obligation with D4 biodiesel RINs.

Other senators said corn ethanol hurt obligated parties.

"The federal government forcing Americans to buy billions of gallons of corn ethanol is terrible policy on many levels. For starters, it imposes financial harm on consumers and refineries, risking thousands of good-paying jobs," wrote senator Toomy.

Trade groups last month expressed similar concerns.

By Thom Dwyer

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31/10/24

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