EPA rejects plea to tweak ethanol mandate’s rules

EPA rejects plea to tweak ethanol mandate’s rules
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The Environmental Protection Agency (EPA) is making plans to reject a plea by some fuel refiners to shift responsibility for ethanol mandate compliance away from them.

A handful of refining companies like Valero Energy Corp. and billionaire Carl Icahn’s EVR Energy have asked that the EPA move the “point of obligation” for compliance to fuel wholesalers.

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The EPA earlier this year said that it would formally consider the requests. But on Thursday, it announced plans to reject them.

“EPA believes that a change in the point of obligation would be a substantial disruption that has the potential to undermine the success of the RFS [Renewable Fuel Standard] program, as a result of increasing instability and uncertainty in programmatic obligations,” the agency said in a Federal Register notice that is likely to be published soon.

Under the RFS, refiners must either blend biofuels like ethanol and biodiesel into their traditional gasoline and diesel or buy credits from other refiners that have done so.

Changing the “point of obligation” would still keep the same amount of biofuels in the fuel stream.

The decision, though not unexpected, is a big loss for the refiners, who have said that compliance costs them billions of unnecessary dollars a year. It created a rift among different sectors of the oil industry.

The Renewable Fuel Association, which represents major parts of the ethanol industry, said it agreed with the EPA’s conclusion.

“We also support EPA's decision to solicit input from the public on this issue, as any discussion related to changing the structure of the RFS should be open, transparent, and informed by sound analysis,” Bob Dinneen, the group’s president, said in a statement.