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Trump Proposes Higher Ethanol Sales, Pledges Help for Refiners
USAgNet - 04/13/2018

President Donald Trump on Thursday outlined changes to U.S. biofuel laws that would allow more ethanol to be used, a nod to farmers caught in the crosshairs of a potential trade war with China, while also offering some relief to fuel suppliers who have complained about compliance costs.

Allowing the year-round sale of fuel containing as much as 15 percent ethanol, a blend known as E-15, "makes a lot of farmers happy," Trump said prior to a White House meeting with Republican lawmakers from farm states. "We're going to also be helping the refineries," he added.

Trump has held a series of meetings in recent months to carve out a biofuels deal that satisfies the agriculture and oil lobbies, which also happen to represent two of his most important constituencies: farmers in the rural Midwest and blue-collar workers in industrial areas, reports Bloomberg.

The two sides have clashed repeatedly over the Renewable Fuel Standard, a complicated policy that crosses political lines. Oil industry representatives have cited the January bankruptcy of Philadelphia Energy Solutions Inc., the largest U.S. East Coast oil refiner, as evidence that the biofuel mandate is too costly and changes are needed.

However, ethanol is immensely popular with farmers because it's largely derived from corn. Agricultural interests argue that any weakening now of requirements to use ethanol would compound the uncertainty felt by farmers after China last week outlined a retaliatory tariff on U.S. soybeans.

On Wednesday, U.S. Agriculture Department Secretary Sonny Perdue said farmers are feeling anxiety not only from the possible trade war with China but also because the U.S. Environmental Protection Agency is issuing hardship waivers to some small refineries, allowing them to avoid complying with the RFS.

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