A new advertising campaign from the American Fuel and Petrochemical Manufacturers (AFPM) spotlights the surging costs and unprecedented impact of biofuel mandates on the US’ refineries and the need for President Biden to take immediate action to get these costs under control.
In a statement, the AFPM said that Renewable Fuel Standard (RFS) compliance costs are higher in 2021 than they have ever been, and that costs across the refining sector are likely to near US$30 billion, if a course correction is not made by President Biden and EPA Administrator Regan.
Two years ago, RFS compliance costs were US$3.6 billion.
AFPM President and CEO Chet Thompson stressed why RFS costs need to be treated with much more urgency: “What is happening in the RIN market is not normal or sustainable. Washington has gotten so desensitised to soaring RFS prices that policymakers are not paying attention to the very real impacts on US refineries of all sizes and the thousands of men and women — many of whom are unionised workers — employed at these facilities. RFS costs are putting critical US petroleum refining capacity at risk when we can’t afford to lose any more.
“President Biden and Administrator Regan have tools to provide relief and keep RFS compliance from becoming an even bigger crisis. Through this campaign, we hope to show why their action and leadership are needed.”
The AFPM notes that RIN prices set new highs 46 times this year, eclipsing by 27% the previous all-time D6 RIN record from 2013.
Ethanol gallons have also outpriced wholesale gasoline in 21 out of 27 weeks this year.
Amid these prices, some individual refineries faced 1Q21 RFS obligations exceeding their entire annual RFS bills from prior years.
Even with RIN prices recently dipping from the new highs, the RFS programme remains on a trajectory to amass the single-largest annual cost burden in the program’s history, roughly double the five-year program high set in 2016, said AFPM. Undergirding all of this is the fact that RINs may soon run out, and RIN bankruptcy is uncharted territory for the RFS.
Read the article online at: https://www.hydrocarbonengineering.com/refining/15072021/afpm-urges-biden-to-get-rfs-costs-under-control/