Trump to Modestly Boost 2019 Biofuel Mandate in Gasoline

(Bloomberg) -- The Trump administration will order oil companies to blend more renewable fuel into gasoline and diesel next year, according to four people familiar with the plan, even as the government begins making sweeping changes that could lower biofuel quotas for years to come.

The Environmental Protection Agency will announce Friday that it is requiring refiners to blend 19.92 billion gallons of biofuel next year, a 3.3 percent increase over the current requirements and largely in line with quotas the agency proposed in June, said the people, who asked not to be named prior to the formal release.

No more than 15 billion gallons of the total can come from conventional sources such as corn-based ethanol. At least 4.92 billion gallons must be be fulfilled by advanced biofuel, including at least 418 million gallons of cellulosic renewable fuel, such as ethanol made from switchgrass.

The EPA also imposed a 2.43 billion gallon quota for biodiesel in 2020, a 15.7 percent increase from the 2.1 billion gallons required in 2019.

The agency is not adjusting its final quotas to account for waivers exempting some small refineries from the biofuel blending requirements-- a defeat for agricultural leaders and political allies who have implored the Trump administration to halt the practice or at least force other refineries to make up the difference.

With the release, the Trump administration will be kicking off a head-to-toe overhaul of the Renewable Fuel Standard, setting off a fresh battle between the oil industry and agricultural interests over U.S. gasoline market share that will play out against an increasingly political backdrop.

Refiners and some environmentalists will be pressuring the EPA to dial back the 13-year-old biofuel mandate next year as President Donald Trump courts voters in the top corn- and ethanol-producing state of Iowa.

©2018 Bloomberg L.P.