EPA, USDA, and DOE Meet for Further Negotiations on RFS Deal

Yesterday, EPA Deputy Administrator Andrew Wheeler, DOE Deputy Secretary Dan Brouillette and USDA Deputy Secretary Stephen Censky met to discuss potential changes to the Renewable Fuel Standard (RFS) program. The discussions came after a tentative deal was supposedly reached between Senators representing corn and refining states, as well as the Secretary of Agriculture and the Administrator of EPA at a White House meeting earlier this month. However, parts of the deal need to be negotiated further due to disagreements between officials.

Under the tentative agreement reached earlier this month, the ethanol industry would receive a year-round RVP waiver for E15 blends, while biofuels exports would qualify for RINS generation. The White House also agreed to not pursue an artificial cap on RINs prices. The ethanol industry had already pushed back against any effort to cap RIN values and/or allow ethanol exports to qualify for RINs generation since any reduction in RINs will likely hurt E15 sales. In other words, for E15 to become a viable “new fuel” in the marketplace, the ethanol industry needs the 15-billion-gallon ethanol mandate to stay intact which maintains RIN values. Attaching RINs to exported ethanol would likely provide relief to refiners by reining in the cost of RINs.