NATSO Vice President of Government Affairs David Fialkov will testify March 29 at an Environmental Protection Agency (EPA) field hearing in Ypsilanti, Mich., about the agency’s newly proposed regulations that would allow E-15 to be sold year-round and also reform the market for Renewable Identification Numbers (RINs).
The proposed rule, issued on March 12, imposes a number of measures to “enhance transparency” and minimize “price manipulation” in RIN markets. NATSO thinks that these measures are unnecessary solutions in search of a problem and are clearly designed to artificially lower RIN prices.
In his testimony, Fialkov will state that the RIN market reform aspect of the proposal is un-necessary.
In issuing the proposed rule, EPA said that it has not seen any “data based evidence” of RIN market manipulation that would necessitate these reforms. As such, Fialkov will urge the agency to confine the final rule to those aspects of the proposal that enhance disclosure requirements and refrain from pursuing any reforms that are designed to modify market participants’ behavior. Once EPA obtains data through enhanced disclosure requirements, the agency could assess whether it is necessary to reconsider those provisions that would modify behavior.
Fialkov also will remind the agency that the primary source of volatility and manipulation in RIN markets is uncertainty and opaqueness surrounding small refinery exemptions.
EPA has the authority to grant waivers exempting small refineries — those producing less than 75,000 barrels of fuel per day — from their obligations under the Renewable Fuel Standard (RFS) if they can prove that it would cause them an economic hardship.
Under the Trump Administration, an unprecedented number of exemptions have been granted, including to some of the nation’s biggest refineries. On March 28 EPA issued yet another small refinery exemption for 2017, bringing the tally for the year to 35.
NATSO thinks EPA needs a transparent process to guide its assessment of small refinery waiver requests to ensure that such exemptions don’t continue to undermine the law’s intent and decrease demand for biofuels.
EPA is currently seeking public comment on the RIN Market Proposal, and those comments are due on April 29, 2019. NATSO will be filing comments and is also urging members to provide feedback that can be incorporated into NATSO’s comments to EPA.
NATSO’s full analysis on EPA’s proposed RFS reform regulations can be found here. NATSO members who want to provide feedback on the RIN Market Proposal should contact David Fialkov, Vice President, Government Affairs at email@example.com.
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