Will Pruitt Push RFS Compliance Change?

A change regarding who must comply with the Renewable Fuel Standard (RFS), from refiners and importers to downstream parties, may be possible ahead if it strengthens the biofuel mandate program, Scott Pruitt, President-elect Donald Trump's pick for the next EPA administrator, said at his nomination hearing January 18.Some small retailers and refiners applauded the development, noting a volatile compliance credit market is threatening to shutter businesses.But Pruitt got a lot of push back over the topic during his confirmation hearing before the Senate Environment and Public Works Committee. Sens. Joni Ernst, R-Iowa, and Tammy Duckworth, D-Ill., challenged Pruitt, the current Oklahoma attorney general, to pledge to maintain the current RFS point of obligation, but Pruitt said only he would use discretion to strengthen the biofuel program.A change in the RFS point of obligation would mean more parties have to comply with the program by submitting the credits, known as Renewable Identification Numbers (RINs). Biofuel producers say that increase would make compliance and enforcement far more difficult for the Environmental Protection Agency. RINs are serial numbers attached to batches of renewable fuels that can be separated and traded.Hedge funds, banks, large retailers and other companies trade the RINs. Of note, Carl Icahn, Trump's regulatory adviser, has criticized the credit market.In November 2016, the EPA tentatively denied several petitions to change the point of obligation, arguing the current framework is functioning well and petitioners failed to demonstrate a change would increase biofuel use. EPA opened a public comment period on the proposal, which will now be completed February 22. Fuel importers and non-renewable fuel producers can comply by blending biofuels into their products or by purchasing the credits.In the hearing, Pruitt said he would consider the comments as administrator. "If confirmed I would be dealing with that issue and need to respond to the comments made as part of the record," he said. "It would be unwise to prejudge that outcome. Any steps I would take as EPA administrator would be in furtherance of the RFS."