After endless delays, the EPA has finally set biofuel blending mandates for 2022, as well as retroactively for 2020 and 2021, due to the reduced energy demand during the COVID-19 pandemic.
- 2022 mandate: 20.63B gallons
- 2021: 18.84B gallons
- 2020: 17.13B gallons
The EPA denied 69 oil refiners’ exemption petitions, but it will allow extra time for small refiners to meet the blending obligations. In addition, three small refineries were granted the opportunity to meet 2016, 2017, and/or 2018 RFS obligations, which will release them from purchasing additional RFS credits.
The backstory: Oil refiners must blend biofuels for the U.S. fuel pool or buy credits to comply with mandates under the Renewable Fuel Standard. The law has been fueling controversy—with oil and corn lobbies pitted against each other.
Biofuel advocates are beaming, but the oil refining industry is bummed, saying the high volumes threaten the viability of small refineries.
Biofuel got another boost from the $700M the USDA is throwing in the tank to help biofuel producers that faced unexpected market losses during the pandemic. The injection stems from the Biofuel Producer Program, created as part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).
COVID-19 caused a 3.7B gallon market loss for 195 biofuel producers, and the investment will support economic recovery for the biofuel industry.