US EPA proposes higher biofuel blending volumes through 2027

June 16, 2025 1:27 PM

Source:  Reuters … By Stephanie Kelly 6-13-25

NEW YORK, June 12 - President Donald Trump's administration on Friday proposed to increase the amount of biofuels that oil refiners must blend into the nation's fuel mix over the next two years, driven by a surge in biomass-based diesel mandates.

After months of lobbying on the issue, the biofuels industry welcomed the move, which also included measures to discourage biofuel imports.

The U.S. Environmental Protection Agency proposed total biofuel blending volumes at 24.02 billion gallons in 2026 and 24.46 billion gallons in 2027, up from 22.33 billion gallons in 2025.

Under the Renewable Fuel Standard, refiners are required to blend large volumes of biofuels into the U.S. fuel supply or purchase credits, called RINs, from those that do. Small refiners can apply for an exemption to the requirements if they can prove the obligations would cause undue harm.

The proposal is driven in part by an increase in biomass-based diesel requirements. EPA set a quota of 7.12 billion biomass-based diesel RINs for 2026 - a measurement of the number of tradable credits generated by blending the fuel.

It said it projected that mandate would lead to the blending of 5.61 billion gallons. The EPA expressed the biomass-based diesel requirement in billion RINs in accordance with the agency's proposal to reduce the number of RINs that could be generated from imported biofuels.

After accounting for the reduction for imported biofuels, the EPA said it projected the number of RINs generated for biomass-based diesel would be 1.27 per gallon in 2026 and 1.28 RINs per gallon in 2027. Previously, the EPA projected the average gallon of biomass-based diesel generated 1.6 RINs.

The volume mandate for 2025 for biomass-based diesel was 3.35 billion gallons, a figure the industry had complained was too low.

Renewable fuel (D6) credits for 2025 traded as high as $1.06 each on Friday, up from 88 cents the previous session, traders said.

Biomass-based (D4) credits traded as much as $1.17 each, versus between $1.05 and $1.01 the previous session, traders said.

The oil and biofuel industries, both powerful lobbies in Washington, have highly anticipated the release of the proposal, which, if finalized, determines the fate of billions of dollars in fuel and tradable credit transactions.

As one of the first decisions made by the current Trump administration regarding federal biofuel policy, the proposal signaled the administration's support for the biofuels industry, which has at times been at odds with oil companies.

A coalition of oil and biofuel groups banded together in a historically unusual move this year to request biomass diesel blending for 2026 at 5.25 billion gallons, compared with 3.35 billion gallons in 2025.

The coalition, led by the American Petroleum Institute, argued that the EPA's previous mandates failed to support the growth of the advanced biofuel industry and undercut the market.

In the proposal, the EPA said it was still determining how to decide on outstanding petitions from small refiners for exemptions to the rules.

The EPA estimated a potential range of exempted volumes for 2026 and 2027 from zero gallons, if the EPA denied petitions for all qualifying refineries, to 18 billion gallons, if it granted all petitions.

The Fueling American Jobs Coalition, which represents oil refiners, said the EPA's proposed requirements were inconsistent with real-world market demand and infrastructure capacity, and threatened to push up regulatory costs and shut oil refineries.

The biofuel industry broadly cheered the proposal.

"USDA and EPA have never been more aligned on the need for more American-grown biofuels," said U.S. Secretary of Agriculture Brooke L. Rollins.

"The volumes proposed today provide crucial growth opportunities for U.S. ethanol producers and farmers," said Renewable Fuels Association President Geoff Cooper.

Brazil central bank hikes rates to near 20-year high, leaves next steps open

May 28, 2025 2:27 PM

Source: Reuters … Reporting by Marcela Ayres; editing by Diane Craft 5-7-25

BRASILIA, May 7 (Reuters) - Brazil's central bank raised interest rates by 50 basis points on Wednesday in a sixth straight hike that pushed borrowing costs to their highest in nearly 20 years, and left future steps open amid global uncertainties and sticky domestic inflation.

The bank's monetary policy committee, known as Copom, raised the Selic to 14.75% in a unanimous decision, matching forecasts from 32 of 35 economists in a Reuters poll.

Policymakers stressed that the current environment calls for a "significantly contractionary monetary policy for a prolonged period" to bring inflation to target, dropping previous language about the need for "a more contractionary" stance.

"For the next meeting, the scenario of heightened uncertainty, combined with the advanced stage of the current monetary policy cycle and its cumulative impacts yet to be observed, requires additional caution in the monetary policy action and flexibility to incorporate data that impact the inflation outlook," they added in the decision's statement.

Flavio Serrano, chief economist at BMG Bank, said the central bank left the door open for a smaller rate hike in June if needed, though he sees it as unlikely.

"My base case is zero increase in June, holding at 14.75%. There may be room for a cut at the very end of the year, depending on how the outlook evolves," he said.

In March, the central bank had already flagged the need for further tightening this month, though at a slower pace than the previous three 100 basis-point hikes.

With Wednesday's move - announced just hours after the U.S. Federal Reserve held rates steady but cited the risk of rising inflation and unemployment - the Selic benchmark rate has now reached its highest level since August 2006.

The sky-high rates come against a backdrop of a 5.49% annual inflation rate, well above the official 3% goal, with markets skeptical that inflation will return to target even by as far out as 2028.

The aggressive tightening has added 425 basis points to the benchmark rate since September, but policymakers stressed on Wednesday they observe "an incipient moderation in growth," with indicators of domestic economic activity and the labor market still exhibiting strength.

Now, however, the inflation risk balance is no longer described as tilted to the upside, but rather as featuring higher-than-usual risks on both sides - including a new disinflationary risk tied to falling commodity prices.

"Indeed, the external scenario points to a greater disinflationary outlook than previously expected, which could support a pause in monetary tightening as early as June," said Rafaela Vitoria, chief economist at lender Inter.

Global uncertainties, triggered by sweeping U.S. trade tariffs that have clouded the outlook for the world's largest economy, have led Copom members to emphasize the need for greater caution and flexibility in remarks ahead of the decision.

The current environment, they previously argued, not only limits their ability to provide any guidance but also requires policymakers to consider a broader and diverse set of data to assess whether monetary policy is achieving its intended effects.

Their concern about the trajectory of Latin America's largest economy came despite some favorable inflationary developments since the Brazilian central bank's latest policy meeting, including a stronger currency and lower commodity prices.

On the other hand, the government of President Luiz Inacio Lula da Silva has unveiled new stimulus measures, such as changes to rules governing payroll-deductible loans, as it struggles to reverse a plunge in the leftist leader's approval ratings.

Considering changes in macroeconomic conditions, Brazil's central bank on Wednesday lowered its 2025 inflation forecast to 4.8%, down from 5.1% projected in March.

For the fourth quarter of 2026, the period most influenced by current monetary policy decisions, the bank now projects the 12-month inflation rate to reach 3.6%, down from 3.7% estimated in the quarterly monetary policy report released late March.

Oil Falls as Potential for Fresh Iranian Supplies Adds to Gloom

May 16, 2025 2:03 PM

Source: Bloomberg

(Bloomberg) -- Oil fell for a second day after President Donald Trump said the US and Iran are getting closer to a deal regarding Tehran’s nuclear program, a move that could unleash more supplies onto a market that is rapidly approaching a glut.

Brent fell more than 2% to settle below $65. US crude futures also slid.

If all sanctions on Iran are lifted, a flood of crude could hit global markets, analysts estimated. The development adds further gloom to a market that is already swimming in additional supplies after OPEC+ revived output at a faster pace than anticipated and trade talks between the US and major consuming nations cloud the demand outlook.

“Trump wants a deal with Iran as he continues to pursue lower oil prices,” Vikas Dwivedi, Macquarie’s global oil and gas strategist, said in an interview. “The conversation is trending towards a deal that could be reached as soon as this year.”

Dwivedi expects that an agreement could boost oil supplies between 200,000 and 300,000 barrels a day. Already, Iranian oil exports have grown, reaching around 1.7 million barrels a day in April, he added.

Though Trump told reporters in Doha that a deal was close, his latest rhetoric was more optimistic than that of Iran. Its lead negotiator, Foreign Minister Abbas Araghchi, on Wednesday urged the US to come to the next round of Oman-mediated talks with a “more realistic” approach. The date and location for those is yet to be decided.

“In less than 24 hours, the narrative has shifted from the US imposing new sanctions on Iran to growing speculation that a diplomatic breakthrough may be within reach,” said Arne Lohmann Rasmussen, chief analyst at A/S Global Risk Management.

“If a deal is concluded, it would increase the likelihood of a significant oversupply later this year, especially when combined with the planned production increases from OPEC+,” he said.

Brent has averaged about $63 a barrel so far this month, the lowest price since 2021. The pullback will help soothe inflationary pressures in consuming economies but hits the coffers of major producers.

US shale companies have already reined in capital spending plans, and Saudi Arabia has lifted borrowing levels as the low prices show signs of biting.

Adding to the negative sentiment, the International Energy Agency said it expects global consumption growth to slow for the rest of this year as trade uncertainty puts pressure on demand.