US Farmers, Biofuel Firms Could Win in EPA Proposals
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The U.S. government is considering two proposals that would likely help farmers by requiring larger oil processors to make up for lost biofuel demand after the Trump administration earlier waived some blending requirements for small refiners.
Under one of the proposals, fuel makers would have to take 50% of the blending obligations for 2023, 2024 and 2025 that were originally assigned to small refineries granted exemptions, the Environmental Protection Agency said in a. The second suggests a 100% reallocation of waived requirements through additional mandated volumes during the 2026-27 period.
If adopted, either proposal would likely represent a victory for farmers, crop processors and biofuel makers and would ease concerns over demand being eroded by waivers typically granted to small refineries. Meanwhile, the measures would place additional burdens on large crude oil processors.
Shares of biofuel feedstock supplier Darling Ingredients Inc. surged as much as 10% after the news. Archer-Daniels-Midland Co. gained as much as 4%, with Bunge Global SA jumping 4.7%. Small oil processors including Delek US Holdings and CVR Energy Inc. also climbed.
The EPA will receive comments on the proposal through Oct. 31 before issuing a final decision.
In June, the EPA proposed a significant increase in the amount of biofuels that refineries need to blend into gasoline and diesel supplies. Last month, the agency granted some small oil refineries exemptions from blending mandates for 2023 and 2024.
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“With this proposal, EPA acknowledges how important biofuels like ethanol are to the rural economy,” Emily Skor, the chief executive officer of biofuel trade group Growth Energy, said in a statement.
The American Fuel & Petrochemical Manufacturers criticized the move, saying it will further increase costs for fuel makers and consumers.
“Consider EPA’s announcement a multibillion dollar-addendum to its already-historic $70 billion-per-year RFS proposal,” the group said in a statement. “Americans and U.S. refiners should not have to pay for this nonsense.”
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