Lawmakers Unveil E15 Proposal Expanding Blending Exemptions
(Bloomberg) -- US lawmakers unveiled biofuels legislation that would expand sales of higher-ethanol gasoline and give exemptions from annual blending mandates for some small oil refineries that have received them in the past.
The proposal, which is part of the Senate Agriculture Committee’s farm bill, is a stark shift from previous plans that would have cut those exemptions significantly. The draft also allows regulators to force companies that didn’t receive breaks to offset their competitors’ exemptions over the first 500 million exempted gallons of biofuel.
The provision may mean that oil companies without small refining units have to foot even more of the bill for bringing biofuels to market.
Efforts to authorize permanent sales of higher-ethanol, or E15, gasoline have failed for over a decade. A recent proposal that passed in the US House of Representatives paired E15 expansion with limits on exemptions from biofuel-blending requirements for small refineries — a provision that has drawn support from some large oil companies but sparked fierce resistance from smaller operators.
A potential sticking point for the latest plan is that exemptions are partly based on whether refineries qualified in 2023-2025, yet some companies are still waiting to find out whether their facilities were eligible during that period. Some refiners have criticized the Environmental Protection Agency for repeatedly delaying decisions, going as far as to sue the agency.
Under current rules, small refineries have to apply for hardship relief annually. The new proposal’s approach of effectively automatic exemptions for many facilities would be more predictable. A refinery qualifies as small if it processes no more than 75,000 barrels of crude a day — no matter the parent company’s size.
“Our priority is to get E15 to the president’s desk, and we’re continuing to review the details of the language in the farm bill proposal,” said Emily Skor, chief executive officer of biofuels trade association Growth Energy.
The farm bill faces obstacles before it could pass, including disagreements between political parties and potential pushback from various farm groups and refiners. Senate Agriculture Committee Chair John Boozman said in a statement that lawmakers will begin marking up the text next week.
The debate over biofuels is heating up as producers and farmers hunt for new sources of demand for crops. The stakes have only intensified since the Trump administration set record-high blend mandates earlier this year that are challenging the industry. As the costs of meeting the mandates have risen, so too has the value of an exemption.
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