Reuters is now reporting two of its sources indicate EPA has proposed retroactively lowering the 2020 Renewable Fuel Standard blending obligations in a nod to reduced fuel demand due to the Covid-19 pandemic. This would not be received well by the corn and ethanol industries. Some refiners and others like Delta Airlines have amassed massive shortfalls in Renewable Identification Numbers (RINs) needed to comply with mandates, in an apparent bet the Biden administration would either waive requirements or that RIN prices would fall. Refiners have until Jan. 31, 2022 to prove compliance with 2020 requirements.
The newswire previously reported the agency was recommending reducing mandates for 2021 from 2020 levels while raising mandates for 2022 vs. the previous two years. Now the wait is for an official announcement of the actual proposed levels from EPA, and that will not happen until after OMB has completed its review of the proposed levels, hold several meetings with other government agencies and those in the private sector. Proposed levels are subject to change.
Also of note, EPA also confirmed to news services that it has sent its proposed RFS levels to the Office of Management and Budget.