This week, two anonymous sources told Reuters that the Environmental Protection Agency (EPA) is considering revising biofuel quotas downward after years of underperformance from the biofuel industry.
Biofuel, which is predominantly made from corn in the US, is a political minefield in the Trump Administration.
On the one hand, biofuel processors have enjoyed years of subsidies from the US federal government. The EPA mandates that oil refiners must mix a certain amount of biofuel into their gas and diesel before it is sold in the US, reasoning that cutting oil with biofuel reduces the carbon footprint of fossil fuel use. The quota also helps politicians curry favor with heavy corn-producing midwest states like Iowa, Nebraska, and Indiana, which supported Trump in the most recent presidential elections.
On the other hand oil refiners, another bastion of support for the Trump Administration, oppose having to blend ethanol into their product, arguing that it costs too much to buy ethanol or biofuel credits to come into compliance with federal rules.
In 2007, the US set progressively more ambitious biofuel targets in for oil refiners out to 2022. The Trump Administration tried to revise the targets in favor of oil refiners in 2017, but met staunch opposition and later said it wouldn’t cut biofuel quotas.
Now, Reuters says that the EPA will move to reduce the biofuel targets for 2020, 2021, and 2022. “An EPA official confirmed the agency is working with stakeholders on a reset proposal, and aimed to finalize its plan by November 2019,” Reuters wrote.