Senator Ted Cruz of Texas is proposing to cap the price of renewable fuel credits purchased by refiners at 10 cents, a mere fraction of the current market value.
Prices of renewable fuel credits were trading at roughly 70 cents last week. The credits had been trading at 90 cents each at the end of November.
Cruz is making the proposal to help refiners adhere to the Renewable Fuels Standard. The proposal follows a hold Cruz placed on the vote to confirm Bill Northey to a top Department of Agriculture post, which was the result of friction over biofuels proposals between the oil and biofuels industries, and the Trump administration.
The senator also proposed forming a working group of administration officials, lawmakers, and stakeholders to devise a “longer-term solution,” according to Reuters. The ethanol industry has said in the past that placing caps on the credits was a non-starter, and has instead argued for policies to increase volumes of ethanol in the U.S. gasoline supply. They claim the volume increase would boost supplies of the credits, lowering their prices.
From the National Association of Farm Broadcasting News Service.