U.S. to turn down biofuel program tweaks in blow to refiners, Icahn: sources

Express News Global

By Reuters News|Updated: August 04, 2017

U.S. to turn down biofuel program tweaks in blow to refiners, Icahn: sources
U.S. to turn down biofuel program tweaks in blow to refiners, Icahn: sources

WASHINGTON/NEW YORK (Reuters) – The Environmental Protection Agency will decline a proposed overhaul of the United States biofuels program that would have moved mixing obligation far from refining business even more down the fuel supply chain, 3 sources acquainted with the matter informed Reuters on Thursday.

The choice is a blow to independent oil refiners like Valero Energy Corp and CVR Energy that have stated the requirement costs them numerous countless dollars every year, along with to billionaire financier Carl Icahn who holds a bulk stake in CVR and vocally supported the modification.

Online news website Politico was very first to report the EPA’s choice, pointing out an unnamed senior administration authorities.

Among sources who spoke with Reuters stated company will likely reveal the relocation next week.

An EPA authorities decreased to comment. Efforts to reach Icahn were not effective.

None of the sources had the ability to offer a factor behind EPA’s choice. Ethanol manufacturers had actually lobbied for years versus the suggested modification, stating it would weaken biofuels policy by making it too complex.

Due to the fact that they were not licensed to speak openly, the sources decreased to speak for attribution.

The United States Renewable Fuel Standard, embraced in 2005, needs increasing volumes of biofuels like ethanol in the country’s fuel supply to increase U.S. farming, lower contamination, and cut dependence on imports.

Independent refiners had actually petitioned the EPA consistently throughout the administration of previous President Barack Obama to alter the law’s requirement that refiners mix the fuels, stating they do not have actually the centers had to do so.

Refiners not able to mix are needed to buy mixing credits, called RINs, from others who can. The requirement expense Valero, America’s leading refiner, some $750 million in 2016, the business has actually stated.

Icahn tossed his weight behind the suggested modification this winter season, sending a strategy to the White House on the subject. Due to the fact that of his refinery stake, this raised the hackles of Democratic legislators who stated the relocation was a dispute of interest.

His business, CVR Energy, delayed the majority of its 2016 RIN commitment into this year, wagering costs would fall. Costs fell in the very first quarter as Icahn, then a consultant to Trump, was working to alter the point of responsibility or where the obligation lies for mixing.

RIN costs were steady on Thursday.

” I believe refiners understood this was coming,” one broker stated.

Shares of CVR were down 0.4 percent at $19.02 on Thursday afternoon. Valero shares were down 0.2 percent at $68.38.

Biofuels maker POET LLC praised the relocation.

” Changes to the point of commitment would produce market confusion, raise fuel costs and get rid of rewards for providing cleaner-burning biofuel blends to customers throughout the nation,” stated representative Rob Walther.

Extra reporting by Chris Prentice in New York