Reports
have surfaced that South American biofuels are the reason why the
Environmental Protection Agency (EPA) pulled an announcement of
Renewable Fuel Standard (RFS) volume requirements. Concerns that
refiners will import ethanol from Brazil and biodiesel from Argentina to
fulfill RFS volume requirements helped lead EPA Administrator Scott
Pruitt to reconsider quotas for those fuels, according to several
reports and sources. A coming announcement may include lowering the
targets so refiners can rely mostly on U.S.-made biodiesel and corn
ethanol.Until the pullback, EPA had sent the White House Office of
Management and Budget (OMB) proposed quotas that would have required the
use of 15 billion gallons of conventional corn-based renewable fuel.
But some reports indicate the new concerns are causing the agency to
rethink that approach.Meanwhile, biodiesel producers have filed a trade
complaint against imports from Argentina and Indonesia, asking the
government to impose tariffs to counter what they say are unfair
subsidies and dumping. However, the U.S. trade decision will take a
while to be announced and that could delay EPA's RFS announcement longer
than initially thought.Should the U.S. government announce measures to
restrict imports, the price of credits tracking compliance with RFS
mandates would "drive up consumer cost significantly," said Mike
McAdams, president of the Advanced Biofuels Association. "If you want to
stick it to the consumer, Mr. Administrator, just roll back the number
for imported fuels with your misguided America-first policy," McAdams,
whose members include Brazilian-based producers, said in an interview
with Bloomberg BNA. "You need imports to satisfy targets."The RFS allows
refiners to use imports to help satisfy mandates and make up for
domestic shortfalls. The U.S. imported 36 million gallons of ethanol
from Brazil last year, down from more than 400 million gallons in 2012,
according to the Energy Information Administration (EIA). U.S.
distillers produced a record 15.3 billion gallons of ethanol in 2016, it
noted.
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