Oil industry opposition prompted Trump administration officials to at least temporarily abandon a proposal that would force larger refineries to use more biofuel to make up for exemptions granted to smaller facilities, according to two people familiar with the plans.
The Environmental Protection Agency (EPA) is on track to issue a slate of biofuel quotas without the contentious proposal as soon as Friday, said the people, who asked not to be named to discuss private negotiations, according to a report with Bloomberg.
The move follows intense deliberation over the biofuel quota redistribution plan as two key Trump constituencies — the oil industry and agricultural interests — clash over the U.S. renewable fuel mandate.
The stumbling block is an EPA-drafted plan to incorporate some 1.5 billion gallons (5.7 billion liters) of additional biofuel requirements into proposed quotas for next year, with the aim of making up for potential exemptions granted to small refineries. Ethanol producers and farm-state lawmakers have criticized those waivers, saying they undercut a 13-year-old federal law compelling refiners to blend biofuels into gasoline and diesel.
But the administration’s plan for making up for those forgiven biofuel quotas effectively would have meant redistributing the burden to non-exempted refineries, prompting an outcry from the top two oil industry trade groups.
The EPA has been preparing to unveil a proposed rule setting biofuel blending targets for 2019 after weeks of interagency negotiations. EPA Administrator Scott Pruitt and Agriculture Secretary Sonny Perdue had planned to travel to Missouri for an event on Friday that was expected to be the biofuel announcement, but that was called off on Thursday.
The Trump administration has little political and legal room to maneuver. Farm-state lawmakers, including Iowa’s two senators, Chuck Grassley and Joni Ernst, who are both Republicans, have insisted the EPA must back off issuing waivers or reallocate the exempted biofuel gallons. But under the federal Renewable Fuel Standard law, small refineries facing a “disproportionate economic hardship” can get exemptions from annual biofuel quotas.