The U.S. Environmental Protection Agency is expected to recommend to the White House reducing federal biofuel blending mandates for 2021 to below 2020 levels in what would be a blow to the biofuels industry, two sources familiar with the matter said on Friday.
The EPA also is expected to make a separate recommendation to boost the blending mandates for 2022 above the previous two years, according to the sources, who spoke on condition of anonymity.
In the short term, the agency is looking to lower the amount of biofuels that refiners are required to blend into the U.S. fuel pool because the COVID-19 pandemic has sapped fuel demand. The move could be a risk for President Joe Biden’s administration, as some could view it as favoring oil refiners over the lower-carbon biofuels industry even as the administration presses companies to reduce emissions.
The EPA is expected to propose the 2021 and 2022 mandates at the same time, the two sources said. The proposals could change during a formal interagency review process.