<article><p class="lead">Regulators should immediately ban speculation from the market for credits needed to comply with federal biofuel standards, said Carl Icahn, the regulatory adviser to the incoming administration of president-elect Donald Trump.</p><p>Icahn compared the regulations governing the US biofuel mandates to mortgage-backed securities that imperiled global markets in 2008, calling them a known problem that was not fixed before damaging the economy. The investor made the remarks in an interview with CNBC a day after Trump named him <a href="https://direct.argusmedia.com/newsandanalysis/article/1373144">special adviser on regulatory reform</a>, an unpaid position. Icahn holds an 80pc interest in US midcontinent refiner CVR Energy, a business acutely affected by the policy.</p><p>The Environmental Protection Agency (EPA) should immediately end third party "speculator" trading of renewable identification numbers (RINs) needed by refiners, importers and other companies to comply with biofuel mandates, he said. Other changes to the program, called the Renewable Fuel Standard, could come later.</p><p>"I believe that, in the EPA, concerning regulations relative to refineries, you really need a rollback almost yesterday," Icahn said. "That's my quintessential example of what's wrong with regulation."</p><p>Ethanol RINs generated in 2016 fell by 5.5¢/RIN from yesterday to 80¢/RIN, based on <i>Argus</i> assessments.</p><p>Icahn, along with refining executives from Valero, PBF Energy, HollyFrontier and CVR Energy, have advocated for moving more of the burden of complying with annual blending mandates closer to retailers. The current policy transfers money refiners should use to improve facilities to fuel retailers and speculators, Icahn said.</p><p>"There's nothing wrong with saying we want to get cleaner air," Icahn said. "But there is something very wrong in our economy and I think we're going to pay a big price for it if we don't have healthy refineries." </p><p>The idea does not have universal support from refiners. Many prefer an outright repeal of the RFS in Congress. Retailers have argued refiners already recover RIN costs through higher wholesale prices, and that RINs offset the cost of acquiring biofuels that this year have cost more than conventional, oil-based fuels.</p><p>Refiners like CVR pushing for changes to the mandates were simply scrambling to recover from failing to adapt to the mandates like their successful peers, National Association of Truck Stop Operators vice president of government relations David Fialkovtold Argus.</p><p>"These less successful companies now want a government bailout to protect them from their own short-sighted tactics, and they are hoping that because Carl Icahn has the president-elect's ear, they can get their bailout," Fialkov said. "Virtually the entire fuels sector — from marketers to integrated refiners to renewable fuels producers — opposes changing the point of obligation because of the market disruption and higher fuel prices that will result."</p><p>Icahn's advisory role is informal, not a nomination, and does not impart any direct control over policy. The Trump transition team in a statement said that as such it would not require any divestment by the investor. </p><p>Icahn was described as influential in the selection of Oklahoma attorney general Scott Pruitt as incoming head of the EPA and has consulted on the selection of a new head of the Securities and Exchange commission.</p><p>"Donald has a very strong personality and has other advisers," Icahn said. "It's more or less doing what I do now — talk to Donald from time to time."</p></article>
