The U.S. Environmental Protection Agency is expected to propose renewable fuel use requirements for 2018 as soon as this week, five sources told Reuters this week, and traders expect no changes to conventional targets and modest increases to biofuel volumes.
The proposal will mark the first from the administration under President Donald Trump for the controversial Renewable Fuel Standard (RFS), a 2005 law aimed at cutting U.S. oil imports and boosting renewable fuel use.
The EPA is broadly expected to hold its proposed requirements for conventional biofuel, which is mainly corn-based ethanol, unchanged at 15 billion gallons, the maximum under the RFS, said four Washington sources representing oil and biofuels interests.
The persons spoke on condition of anonymity because they are not authorized to speak to the media.
“We are expecting a modest increase in advanced and no change to the 15 billion” for conventional ethanol, said a U.S. biofuels industry source.
Biofuels credits known as Renewable Identification Numbers (RINs) were gyrating in active trade ahead of the announcement, with prices of the biomass-based diesel RINs jumping as much as 4 cents each, according to traders.
The credits are used by fuel companies to meet the annual requirements from EPA for the volumes of ethanol and biodiesel that need to be blended in gasoline and diesel used by American drivers.
The proposal went from EPA to the White House for review last month. It includes targets for conventional and advanced biofuel for 2018 and for biomass-based diesel for 2019.