Bloomberg: Biofuel Makers Seek to Ease Mandates to Avert Congress

July 25, 2013

Mark Drajem, July 25 – Makers of some renewable fuels are asking the federal government to ease quotas for use of their products in a bid to head off a congressional overhaul of a program that refiners say is driving up costs at the pump.

With production of fuels made from sources such as wood waste, algae or used cooking oils at a fraction of what was envisioned in a 2007 law, the Environmental Protection Agency needs to adjust requirements for use of biofuels in coming years, according to the Advanced Biofuels Association. The statute allows the EPA to modify the requirements, and prompt EPA action would quell refiners’ fears that there won’t be enough renewable fuel to meet the mandate, they say.

“It’s highly likely they will be lower than what’s in the statute,” Michael McAdams, the president of the group representing 46 companies, said of the quotas. While changes aren’t needed this year, EPA should set out the proposed mandates for 2014 and 2015 “in one move, so everybody sees what the glide path is.”

Under the federal law, refiners such as Exxon Mobil Corp. (XOM) and Valero Energy Corp. (VLO) must use a certain amount of renewable fuels each year, or buy credits called Renewable Identification Numbers, known as RINs, to meet their production quotas. The program, the Renewable Fuel Standard, has separate requirements for cellulosic fuels, diesel made from biomass such as soybean oil, as well as a general renewable category that is largely filled by ethanol made from corn.