Valero Energy Corp. is calling on the Obama administration to waive the country’s biofuel target, because the cost to reach it has soared, Bloomberg reported.
“We need the waiver now,” Valero Chief Executive Officer Bill Klesse, said in a letter to Environmental Protection Agency (EPA) Administrator Gina McCarthy.
Refiners are required by law to use 13.8 billion gallons of ethanol in 2013. Renewable Identification Numbers (RINs) are attached to each gallon of ethanol to track compliance. Once the additive is blended into gasoline, refiners can retain the certificate to show compliance or trade it to another party. RINs prices have risen more than eight-fold so far this year due to falling gasoline demand and higher biofuel consumption targets.
The Renewable Fuels Standard, set in 2007, calls for 14.4 billion gallons of ethanol to be used in 2014, up 4.3% from this year. The target increased 4.5% this year from 13.2 billion in 2012, Bloomberg noted.
Ethanol is typically blended in a formula of as much as 10% in gasoline. While the EPA has approved blends of 15%, refiners haven’t adopted the higher concentration, citing engine damage concerns.
