President Trump has agreed to make a handful of changes to the federal ethanol mandate sought by oil and ethanol interests, according to senators who met with the president Tuesday.
The changes are meant to reduce the prices of credits that oil refiners buy if they can’t blend ethanol into their fuels — a win for refiners — and to allow higher concentrations of ethanol to be sold year-round — a win for the ethanol and corn industries.
The changes to the Renewable Fuel Standard (RFS) program, all of which Trump will reportedly seek to make through regulatory or executive action, will be the most concrete result from months of efforts by oil- and corn-state Republican senators to push Trump to act.
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“The president’s deal will save the jobs of thousands of blue-collar union workers working at refineries in Pennsylvania, in Texas and across the country,” Sen. Ted Cruz (R-Texas), who met with Trump earlier Tuesday, told reporters.
Allowing sales of higher ethanol concentrations “is a big, big win for corn farmers,” Cruz said, estimating it would spur 700 million gallons of new ethanol sales a year.
Sen. Pat Toomey (R-Pa.), whose state hosts the East Coast’s largest refinery, called the deal an “agreement in principal,” and said some important details need to be worked out.
“That is a constructive development,” he said of the deal.
Sen. Chuck Grassley (R-Iowa), whose state dominates the country in corn ethanol production, confirmed the deal via Twitter, but noted the “devil [is] in details.”
All three GOP senators were in the meeting, along with Sen. Joni Ernst (R-Iowa).
The details are due to be fleshed out by the Environmental Protection Agency (EPA) and the Department of Agriculture.
The White House confirmed that Trump endorsed the proposal to allow higher ethanol blends, but did not confirm other details.
“After several meetings and input from stakeholders on both sides, President Trump is pleased to announce that a final decision has been made that allows E15 to be sold year-round, while providing relief to refiners,” White House spokeswoman Lindsay Walters said in a statement.
“This outcome will protect our hardworking farmers and refinery workers. The president is satisfied with the attention and care that all parties devoted to this issue.”
Under the deal Cruz described, ethanol produced domestically and sold abroad would for the first time count toward minimum sales volumes that the EPA sets each year under the RFS. That is meant to make it easier for the industry to meet the annual volumes, and reduce pressure for domestic fuel refiners to buy ethanol or blending credits, pushing prices down.
In return, the EPA would allow sales of gasoline with up to 15 percent ethanol — dubbed E15 — year-round. Currently, sales are prohibited during the summer months, due to air pollution concerns in warm months.
Cruz had also sought to cap the price of ethanol blending credits by letting the EPA sell them for a set cost, but that is not part of the current deal.
Ethanol interests cheered the reported deal.
“President Trump scored a big win by putting a final nail in the coffin of the refinery-backed RIN cap scheme. We’re also encouraged that the White House has told EPA Administrator [Scott] Pruitt to get to work immediately on a long-overdue fix to summer regulations that limit sales of E15,” Brooke Coleman, executive director of the Advanced Biofuels Business Council, said in a statement.