U.S. EPA to lower biofuel blending mandates

New York, Aug. 20 - The U.S. Environmental Protection AgencyU.S. Environmental Protection Agency is expected to recommend on Friday to the White House to lower the nation's biofuel blending mandates below 2020 levels, in what would be a blow to the biofuel industry, two sources familiar with the matter said.

The EPA is trying to align mandates with actual production levels, which have slumped during the Coronavirus pandemic. The mandates determine the amount of biofuels that oil refiners must blend into their fuel mix.

Under the U.S. Renewable Fuel Standard, oil refiners must add billions of gallons of biofuel to the fuel mix, or buy tradable credits known as RINs from those who do. Refiners can also apply for exemptions from the mandates if they can prove that the obligations would do them financial harm.

Mandates for 2021 have already been delayed by more than half a year due to the coronavirus pandemic.

RINs have tumbled on market speculation around the mandates in the last two days. Renewable fuel credits traded on Friday at $1.42 each, down from $1.50 in the previous session, traders said. Earlier this week, credits were trading above $1.60.