Trump officials are set to cut the number of oil refineries granted waivers from biofuel mandates.
The decision in response to a January court ruling is a boon for biofuel producers who have accused the US government of siding with the oil industry, two people familiar with the matter told Bloomberg News.
The issue is dividing two of Trump’s key political constituencies: agriculture and the oil industry. The president promised to support corn-based ethanol while campaigning in Iowa four years ago but also has cultivated support among the oil industry that oppose the biofuel mandate.
A three-judge panel of the Denver-based 10th Circuit Court of Appeals ruled in January that the Environmental Protection Agency wrongly waived three refineries from requirements to use plant-based fuels.
In response, Trump officials have decided to apply the ruling nationwide and propose a new slate of biofuel quotas for 2020, according to Bloomberg sources.
Oil industry advocates have been lobbying the White House to appeal the 10th Circuit ruling, arguing that if it is applied nationwide, a dramatic reduction in exemptions would put small refineries at risk of closing.
The approach would “eviscerate the small refinery exemption that has been a lifeblood not only to small refineries but the communities that rely on these facilities,” Chet Thompson, president of the American Fuel and Petrochemical Manufacturers, told Bloomberg.
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