U.S. EPA sets 2020-2022 biofuel blending mandates, denies refiners waivers

© Reuters. FILE PHOTO: A sign advertising E15, a gasoline with 15 percent of ethanol, is seen at a gas station in Clive, Iowa, United States, May 17, 2015. REUTERS/Jim Young

By Stephanie Kelly and Jarrett Renshaw

NEW YORK (Reuters) -The U.S. Environmental Protection Agency on Friday issued biofuel blending mandates for 2022 and the prior two years - with this year's number below one proposed in December - while denying oil refiners waivers to be exempt from the requirements.

The EPA set biofuel blending mandates for 2022 at 20.63 billion gallons and retroactive volume mandates for 2021 at 18.84 billion gallons and for 2020 at 17.13 billion gallons. Though it denied the oil refiners' exemption petitions, the agency said it would allow extra time for small refiners to meet their 2020 blending obligations.

The EPA in December proposed to set volumes for 2022 at 20.77 billion gallons, for 2021 at 18.52 billion gallons and for 2020 at 17.13 billion gallons.

The volume mandates, typically set ahead of time each year, were delayed due to the fallout of the coronavirus pandemic, which severely reduced U.S. energy demand.

"Together, these actions reflect the Biden administration's commitment to reset and strengthen the RFS (U.S. Renewable Fuel Standard), bolster our nation's energy security and support homegrown biofuel alternatives to oil for transportation fuel," EPA spokesperson Tim Carroll said.

The decision on the mandates has involved White House staff members, who have had to weigh how the policy could affect record-high gasoline prices, surging food costs and inflation, and Farm Belt constituents. Higher mandates can raise demand for corn and impose costs on fuel producers.

Under the RFS, oil refiners must blend billions of gallons of biofuels into the nation's fuel pool or buy credits from those that do. The credits, known as RINs, are used by oil refiners and importers to show compliance with mandates.

Small refiners can receive an exemption from the requirements if they can prove financial harm from the mandates.

The law has been a hotbed of controversy, typically pitting the powerful oil and corn lobbies against each other.

Reuters first reported the 2020-2022 biofuel volumes earlier on Friday.