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US EPA seeks short-term delay to biofuel blending mandate final rule, sources say

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By Stephanie Kelly and Jarrett Renshaw

NEW YORK (Reuters) -The U.S. Environmental Protection Agency is seeking a short-term delay to a final rule on biofuel blending volume mandates for the years 2023-2025, three sources told Reuters.

The EPA was set to issue a final rule on Wednesday, but now will likely issue it next week, sources said on condition of anonymity. Under the U.S. Renewable Fuel Standard, oil refiners must blend billions of gallons of biofuels into the nation’s fuel mix or buy tradable credits from those that do.

The EPA did not comment, but it has previously said it is working to finalize the rule by a court-ordered deadline of June 14.

The final rule is set to mark a new chapter of the RFS, which is more than a decade old. While Congress set out specific goals for the program through 2022, the law expands the EPA’s authority for 2023 and beyond to change the way the RFS is administered.

Market participants in the oil and biofuel industries have been awaiting a final rule. The RFS is an often contentious law that largely pits the two industries against each other, as ethanol producers and corn farmers like the mandates, as they provide a market for their products, while the oil industry finds the requirements too pricey.

This most recent iteration of the RFS has brought in additional stakeholders, after the EPA in December proposed to include for the first time a pathway for electric vehicle manufacturers to generate lucrative credits under the rule.

However, the EPA is expected to abandon that part of the proposal in the final rule, Reuters previously reported, according to sources.

Also under the December proposal, the EPA would require oil refiners to add 20.82 billion gallons of biofuels to their fuel in 2023, 21.87 billion gallons in 2024, and 22.68 billion gallons in 2025.

Those volumes will include more than 15 billion gallons per year of conventional biofuels like corn-based ethanol, with the rest made up by advanced fuels like those made from switchgrass, animal fats, or methane from dairy farms and landfills.

It is unclear whether those requirements will change in the final rule.

(Reporting by Stephanie Kelly and Jarrett Renshaw; Editing by Paul Simao)

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