White House Pushes Biofuel Deal to Refiners and Producers
- White House officials urged both U.S. biofuel producers and oil refiners to accept a deal to lift biofuel blending mandates in 2020.
- President Trump is pushing biofuel companies to accept a proposal to increase blending quotas next year by 5%.
- Biofuel producers were told that the administration would be willing to lift the amount of biofuels that oil refiners must blend into the fuel pool by 1 billion gallons in 2020 above current proposed levels of approximately 20 billion gallons.
- Biofuel producers want to force large oil refineries to make up for any exempted gallons through a process called "reallocation," which would ensure the increases to biofuel blending mandates recur annually in proportion to the number of waivers.
- In June, the EPA proposed that the volume of biofuels that refiners must blend in 2020 should be just over 20 billion gallons, including 15 billion gallons of ethanol. The administration wants to raise these levels to help offset the numbers of waivers that have been issued to the refiners.
- Any changes the administration wants to make to the RFS, must be finalized by the end of November to take effect in 2020.
- FBN’s Take On What It Means For The U.S. Farmer: We believe that the proposed changes to the RFS as they pertain to production requirements continues to be neutral to a net negative for the U.S. farmer. The recent tactics by the Trump administration to placate the U.S farmer after raising the number of small refiner waivers for energy companies over the summer comes at a difficult time when ethanol and farm margins are under pressure.
- On Wednesday, Sep 11, eastern European agri-consultant SovEcon raised its 2019 wheat crop forecast by 0.5 million tonnes to 74.9 million tonnes.
- SovEcon also raised Russia's 2019 cereal grain crop by 1.4 million tonnes to 118.2 million tonnes.
- On Wednesday, Sep. 11, Ukrainian grain traders' union, UZA, raised its 2019 wheat crop by 600,000 tonnes from its previous estimate to 28.3 million tonnes.
- UZA raised Ukraine's 2019 corn crop by 900,000 MMT to 35.4 million tonnes and increased its barley estimate 400,000 tonnes to 9 million tonnes.
- FBN’s Take On What It Means For The U.S. Farmer: While the direction of Ukraine’s cereal grain production for the 2019/20 crop year has been higher, these production increases can be a direct threat to the U.S export programs. In particular, the bumper Ukrainian corn crop has the ability to challenge US corn exports.
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