#USA #Alexandria #Trump administration #Renewable Fuels #Fuel Retailers

Renewing Commitment to Renewable Fuel Standards

In a significant move toward revitalizing the Renewable Fuel Standard (RFS), major fuel retail associations, including NATSO, SIGMA, and the National Association of Convenience Stores (NACS), have applauded the Trump Administration's efforts in implementing timely rulemakings. These actions are crucial for ensuring that the RFS remains aligned with the market's capability to absorb biofuels while managing associated costs effectively.

The Environmental Protection Agency (EPA) has recently proposed Renewable Volume Obligations (RVOs) for 2026 and 2027 that show a promising alignment with current market conditions, departing from the less practical final volumes set for 2024 and 2025. This shift is welcomed by NATSO, SIGMA, and NACS, who emphasize the importance of these adjustments in bolstering the growth of the renewable fuel market.

Impact on Retail Prices

While the proposed changes are optimistic, industry leaders urge the EPA to keep a close watch on their real-world implications, especially concerning retail fuel prices. By implementing a robust policy framework, the RFS can encourage renewable fuel use, thus supporting the growth of America’s biofuels industry while minimizing inflationary pressures that could adversely affect consumers.

In their comments to the EPA, the organizations outlined several policy recommendations:

• - Reduce RIN Generation for Imported Fuels: The potential for market volatility arises from renewable identification number (RIN) generation linked to imported fuels and feedstocks. Therefore, providing equivalent treatment for domestic and Canadian/Mexican fuels and feedstocks — in line with the Section 45Z Clean Fuel Production Tax Credit — is crucial. If not, the EPA should consider modifying RVO levels by reducing provisions for imports while increasing domestic RVOs proportionally.

• - Address Small Refinery Exemptions: There is a strong recommendation to deny all petitions for small refinery exemptions. All refiners, regardless of their scale, integrate RVO expenses into their gross processing margins, meaning they are subject to similar market dynamics as larger refineries. Any exemptions granted should entail a reallocation of obligations that were waived, ensuring a level competitive field.

• - Fair Treatment for Renewable Jet Fuel: It is vital that the EPA includes conventional petroleum jet fuels under the RFS. Allowing renewable jet fuel producers to generate RIN credits could potentially deter over-the-road biofuel production. A balanced approach that does not favor any specific fuel type will support the overall biofuel consumption goals.

• - Cellulosic Waiver Authority: The organizations advocate that the EPA should refrain from exercising its waiver authority for cellulosic biofuels during ongoing compliance years. Granting partial waivers while simultaneously proposing lower volume requirements may negatively influence investments in renewable natural gas projects.

The Role of Fuel Retailers

The RFS framework is critical as it encourages fuel retailers to incorporate biofuels into their diesel offerings, thereby enhancing affordability for consumers and helping to secure market share. According to the associations, their members, which represent nearly 90 percent of retail fuel sales in the United States, are already at the forefront of biodiesel and renewable diesel fuel sales endorsed under the RFS program.

About the Supporting Associations

• - NATSO: Founded in 1960, NATSO is the leading trade association for America’s travel centers and truck stop industry. It advocates on legislative and regulatory matters, aiming to improve the business environment for its members, who manage truck stops and travel centers across the nation.

• - SIGMA: Established in 1958, SIGMA represents innovative fuel marketers and chain retailers in the U.S. and Canada. The association provides valuable insights and services to its members, ensuring that both branded and unbranded fuel sectors are supported and informed.

• - NACS: NACS has over 1,000 retail member companies, representing a vast network of convenience and fuel retailers. With more than 152,000 stores across the U.S., NACS not only enhances the operation of convenience stores but also advocates for the interests of the retail fuel market.

In conclusion, the positive steps taken towards restructuring the RFS and aligning it with market realities will play a vital role in supporting the renewable fuel sector and addressing the challenges faced by fuel retailers in the current economic landscape.