<article><p class="lead">US refiners critical of federal biofuel mandates expect the policy to change this year under the new administration.</p><p>Refining executives who have pushed for changes to the Renewable Fuel Standard (RFS) obligating terminal operators to also meet annual minimum blending requirements believe they have a strong chance to prevail under the current administration of President Donald Trump. </p><p>"I personally think there is still a 50pc or higher probability that the point of obligation gets moved," PBF Energy chief executive Tom Nimbley said yesterday in a quarterly earnings call.</p><p>PBF and CVR Energy, US independent refiners who reported quarterly earnings this week, have both pushed for changes to the companies who bear the burden of complying with the RFS. The mandates compel refiners, importers and other companies adding to the US transportation fuel supply to ensure rising volumes of renewable fuels blend into that pool each year.</p><p>Companies demonstrate compliance by collecting renewable identification numbers (RINs) made available when renewable and conventional fuels are blended. Refiners who conduct their own blending collect their own RINs, while companies such as PBF and CVR that lack sufficient blending meet obligations by purchasing RINs from other parties.</p><p>Costs for those credits have climbed with concerns that lower fuel demand and retail constraints will make compliance impossible for obligated parties. Refiner Valero spent an estimated $750mn last year; PBF Energy and CVR Energy each spent $350mn and $206mn, respectively.</p><p>But RIN prices have plunged since the November presidential election, plummeting from $1.09/RIN for an ethanol credit on 1 December to settle at 47.88¢/RIN yesterday. </p><p>President Trump expressed support for ethanol during his campaign. But his post-election moves — naming CVR's major shareholder Carl Icahn as an advisor and nominating Oklahoma attorney general Scott Pruitt, who previously opposed the RFS, to head the Environmental Protection Agency — has rattled confidence in the future of the program.</p><p>Both Valero and CVR Energy chief executive Jack Lipinski have said the steep drop in prices was evidence of manipulation in the RINs market. </p><p>"It actually warms the cockles of my heart to see RINs fall this hard, and see speculators get burned," Lipinski said in a quarterly earnings call yesterday. </p><p>EPA will until next week take public comments on a proposal to deny the program changes that Valero, PBF, CVR and others have sought. United Steelworkers members at refineries facing steep compliance costs said they will request EPA approve the changes.</p><p>The renewable fuels industry has opposed the idea, joined by rail, trucking and retail businesses concerned their terminals would make them obligated parties. Integrated independent refiners Marathon Petroleum, Phillips 66 and Tesoro have also opposed the change, preferring an outright repeal or overall reduction in obligations.</p><p>"I think we really need to step back and look at does this Renewable Fuel Standard make sense, in any way, going forward," Marathon Petroleum chief executive Gary Heminger said last week in a quarterly earnings call. "My answer would be no."</p></article>
