U.S. oil refiners are upping the ante in the battle over biofuels in an attempt to win support from the Biden administration. Reports say they’re making moves in the biofuel credit market that may end up forcing them to close plants and fire workers if the president doesn’t bail them out from Renewable Fuel Standard requirements.
The RFS requires refiners to blend biofuels into their fuel supply or buy RIN (Renewable Identification Number) credits from those that do the blending. A study says some of those refiners that had been buying a lot of credits are now building short positions in the credit market. They’re betting that President Biden will side with refiners and roll back the RFS. However, this would anger the Farm Belt, who say this is nothing but a political shakedown.
Refiners know that rising fuel prices have the administration’s attention. “These refineries are daring the Biden administration to make them lay in the bed they made intentionally by running up massive short positions on biofuel credits,” says Brooke Colman, executive director of the Advanced Biofuels Business Council. A review of financial filings shows refiners that had little outstanding biofuel credit liabilities have let them climb to record highs in the third quarter of this year.