EXCLUSIVE Biden Administration Likely to Retroactively Raise Ethanol Blending Volumes for 2021, Sources Say

By Jarrett Renshaw and Stephanie Kelly

The Biden administration is likely to raise ethanol blending mandates for 2021 above the figure it proposed in December to align with actual U.S. consumption levels, according to two sources briefed on the decision.

In December, the U.S. Environmental Protection Agency proposed that refiners blend 13.32 billion gallons of ethanol into the fuel pool, a move that angered farm-belt lawmakers and the industry who said it was too low.

But recent federal figures show U.S. consumption of ethanol at about 13.94 billion gallons. The administration is now considering lifting the 2021 mandate to around that level, the sources said.

A final decision on the mandate has not yet been made, the sources said. The White House and the Environmental Protection Agency, which administers the mandates, did not immediately comment.

Administration officials huddled at the White House on Tuesday to review options for the mandates for the years 2020-2022, which are being set retroactively because of disruptions caused by the fallout of the COVID-19 pandemic, the sources said. The administration has not given any indication it plans dramatic changes from its 2020 and 2022 proposals, the sources said.

The meeting underscores the political implications of the upcoming decision, which will impact fuel and food prices amid a 40-year high in inflation rates.

Under the U.S. Renewable Fuel Standard (RFS), refiners must blend billions of gallons of biofuels into the nation’s fuel pool, or buy tradable credits from those that do.

The rule has long been a point of contention between the powerful oil and corn lobbies. While the mandates have set up a multibillion-gallon market for corn farmers and ethanol producers, merchant refiners claim the requirements are costly and threaten to put them out of business.

In recent weeks, merchant refiners and unions went on an advertising blitz in Washington, Delaware and Philadelphia markets calling on the Biden administration to lower volumes in the final rule, arguing that the program threatens refineries and well-paying jobs.

The Fueling American Jobs Coalition sent out a statement on Wednesday that included letters from Ohio and Michigan labor leaders calling on Biden to lower the proposed biofuel blending mandates offered in December.