Lobbying over U.S. biofuel policy changes intensifies

The biofuel mandate, designed to reduce carbon emissions, has support in corn growing areas but opposition by oil refiners

WASHINGTON, (Reuters) — U.S. President Donald Trump sought to ease concerns that his administration would make major alterations to biofuels policy, telling Iowa’s governor recently that he was committed to a decade-old biofuels program even as a top official considers changing it.

U.S. law requires fuel companies to add biofuels like ethanol and biodiesel to the country’s fuel supply through the “renewable fuel standard,” adopted in 2005.

The Trump administration is considering lowering the mandatory level, a worry for corn-growing states like Iowa. The strong demand from biofuel makers for corn and soy oil helps support the price of those commodities.

Iowa Governor Kim Reynolds said she held calls with Trump and U.S. Environmental Protection Agency Administrator Scott Pruitt last week, in which she urged them not to make that change.

However, White House spokesperson Sarah Sanders said the administration “didn’t make any assurances” on renewable fuel standard (RFS) levels.

The biofuel industry has been ratcheting up pressure in Washington in response to actions from the EPA it sees as threatening the program, which was designed to reduce carbon emissions.

Independent oil refiners, meanwhile, have pushed the Trump administration to soften requirements for ethanol use, which costs them hundreds of millions of dollars annually.

Some refiners want also want exported ethanol to qualify for credits under the renewable fuel program.

Two industry sources told Reuters they had received assurances from White House officials that Trump was directing the EPA to allow credits on exports, but to end its efforts to reduce renewable fuel requirements overall.

Last month, the EPA said it was looking to cut 2018 biodiesel blending mandates, roiling markets and drawing criticism from the country’s farm belt. In July, it proposed cutting total volumes of all renewable fuels use for next year.

Elected officials from the corn-growing Midwest have said they won’t be satisfied with White House reassurances until the EPA publicly agrees not to reduce re-newable fuel standards.

Several senators met with Pruitt last week to discuss the issue.

Iowa Republican Senator Joni Ernst said she had expressed “significant concerns” over the recent moves to potentially set biodiesel requirements for 2018 and 2019 at “substantially lower volumes.”

Senator Charles Grassley, an Iowa Republican, said he told Pruitt “that supporting biofuels isn’t just good policy. It’s also what President Trump promised.”

Reynolds, meanwhile, urged Iowans to contact lawmakers and administration officials and said she is meeting next week with U.S. Vice President Mike Pence and Pruitt in Washington.

Senators wrote to Trump urging the EPA to maintain levels for 2018 and increase its proposed 2019 biodiesel requirements.

Pruitt would not want “to take any steps to undermine the objectives in the statute of the RFS,” said EPA spokesperson Liz Bowman.

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