(Bloomberg) -- Trump administration officials are squeezing biofuel and oil refining executives to agree to a plan to bolster corn-based ethanol and soy-based biodiesel.
In a meeting at the White House on Wednesday, President Donald Trump’s economic advisers gave biofuel producers a Friday deadline for providing ideas on a possible compromise.
Renewable fuel advocates pushed back on a draft administration plan, arguing it would do too little too late to help the industry and offset exemptions allowing oil refineries to dodge annual biofuel-blending quotas, said people familiar with the matter who asked not to be named describing the private deliberations.
They pushed the Trump administration to factor those waived quotas into biofuel-blending targets for 2020, which the Environmental Protection Agency is legally obligated to finalize by Nov. 30. The agency is required to set the annual quotas under the Renewable Fuel Standard, the 2005 law that compels refiners to use biofuel.
That leaves a limited window for the agency to develop a new plan and present it for public comment. Adding to the urgency, Trump last month promised he would soon deliver a “giant package” of biofuel changes aimed at quelling angst in Iowa and other politically important Midwest states over the oil refinery exemptions.
The White House meeting included executives from Louis Dreyfus Co., Renewable Biofuels Inc., Ag Processing Inc., Renewable Energy Group Inc., Archer-Daniels-Midland Co., Green Plains Inc. and POET LLC. Representatives of the National Economic Council led the discussion, said the people familiar with the matter.
The administration is meeting separately Wednesday afternoon with oil refiners, including representatives of Valero Energy Corp., PBF Energy Inc., Monroe Energy LLC, HollyFrontier Corp., Marathon Petroleum Corp. and Phillips 66.
Biofuel advocates insisted they need to see quick action to address the refining exemptions in order to support a Trump deal.
“We remain hopeful that President Trump will move swiftly to protect farmers and biofuel workers, but efforts to reverse the damage will be meaningless unless the agency acts now to stop the bleeding and accurately account for lost gallons from this point forward, beginning in the 2020 biofuel targets,” biofuel groups said in a joint statement Wednesday. “Rural communities across America are counting on this administration to uphold the president’s commitment to biofuels and restore integrity to the RFS.”
Biodiesel executives also stressed that the oil refinery exemptions disproportionately affect producers and distributors of that soy-based fuel. Any Trump administration plan to offset the waivers needs to meaningfully help biodiesel because it has been hurt the most, they argued. Waivers have lowered the cost of compliance credits that are tied to each gallon of biodiesel and help the product compete against lower-cost petroleum-based diesel. Lower credit prices have reduced the margin blenders can recover at the pump, hurting biodiesel demand, industry leaders told the administration.
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