US to keep 2021/2022 biofuel mandate flat to 2020 due to Covid impact

London (Quantum Commodity Intelligence) - The US will keep its federal biofuel mandates unchanged for 2021 and 2022 from 2020 because of the impact of coronavirus on fuel demand, Reuters reported, citing sources familiar with the matter.

The 2020 biofuel blending requirement was 20.09 billion gallons.

Biofuel mandates are typically expanded annually at least in line with expected growth in fuel demand, in order to keep steady or grow the proportion of biofuel blended into finished road fuels.

The news will be welcome to the oil refining sector, which has often viewed the biofuels mandate, implemented per the Renewable Fuel Standard, as a tax or wealth transfer into the agricultural sector, which benefits from sales of corn and soybean oil to ethanol and biodiesel producers.

As such, any adjustments to the mandate are politically sensitive, causing former President Trump to delay the announcement of 2021 mandates ahead of the election last year.

The Environmental Protection Agency, which administers the RFS, will now issue the requirements for both 2021 and 2022 later this year.