Why US oil and biofuel industries are uniting to influence Trump’s policies
US oil and biofuel groups have joined forces to lobby the Donald Trump administration, according to a Reuters report.
The group is asking for an increase in the amount of renewable fuels required to be blended into the nation’s fuel mix from 2026 onwards.
Unlikely alliance
The oil and biofuels industries often disagree on Renewable Fuel Standard (RFS) issues, so their collaboration is surprising, according to the report.
The RFS program, established almost two decades ago, mandates that refiners mix billions of gallons of biofuels into gasoline or purchase credits from those who do.
The oil industry has a long history of viewing biofuels, such as corn-based ethanol, with skepticism and as unwelcome competition to traditional petroleum-based fuels.
This rivalry stems from the fact that both biofuels and petroleum-based fuels are vying for the same market share in the transportation sector.
Threat from EVs
However, the rise of electric vehicles (EVs) has presented a common enemy for both the oil and biofuel industries.
EVs, which run on electricity and do not require liquid fuels, pose an existential threat to the entire liquid fuel market, regardless of whether the fuel source is petroleum or bio-based.
This shared threat has the potential to create unlikely alliances between the oil and biofuel industries, as they may find it necessary to cooperate in order to protect their mutual interests and advocate for policies that support liquid fuels in the face of the growing EV market.
The shift towards electric vehicles represents a disruptive force in the energy and transportation sectors, with far-reaching implications for both the oil and biofuel industries.
While these industries have traditionally been competitors, the threat of EVs could compel them to re-evaluate their relationships and potentially find common ground in their efforts to navigate the changing energy landscape.
Last month, President Trump rolled back former President Joe Biden’s executive order that mandated half of all new vehicles sold in 2030 be electric. Biden’s order aimed to reduce greenhouse gas emissions.
EPA urged to act
“While our organizations have not always agreed on every detail, we have joined together in recognition of the critical role liquid fuels serve in the American economy, to advance liquid fuels, and ensure consumers have a choice of how they fuel their vehicles,” the groups said in a letter to Lee Zeldin, the new administrator for the Environmental Protection Agency, dated Wednesday.
The letter added:
We believe strong, steady volumes for conventional biofuel targets, biomass-based diesel, and advanced fuels would more accurately reflect the availability and ongoing investments in feedstocks and production capacity.
The Renewable Fuels Association, Growth Energy, and the American Petroleum Institute, a prominent national oil trade organisation, were among the groups that signed the letter.
The oil group, American Fuel and Petrochemical Manufacturers, which usually comments on RFS-related issues, did not participate in the letter.
The EPA was urged by the groups to issue multi-year RFS standards to provide more market certainty for both renewable fuel producers and refiners.
Renewable volume obligations (RVOs) were set annually until 2023.
Starting that year, the standards were finalised through 2025. The administration will soon need to start thinking about 2026 volumes.
The EPA has finalised biofuel blending volumes, setting them at 20.94 billion gallons for 2023, 21.54 billion gallons for 2024, and 22.33 billion gallons for 2025.
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