February 28, 2020 | FBN Insights | Kevin McNew

EPA to Reduce Annual Number of Small Refiner Waivers

Court decision could affect biofuel blending requirements for 2020

EPA to Reduce Annual Number of Small Refiner Waivers      

A US Court of Appeals said the EPA must reconsider some exemptions it previously gave to oil refineries. 

EPA overstepped its authority to grant waivers (SRW’s) for HollyFrontier's Woods Cross and Cheyenne refineries and CVR Energy's Wynnewood refinery because the refineries had not received exemptions the previous year.

The Trump administration has decided to pare the number of exemptions granted to small refineries from US biofuel blending laws in response to the court decision.

The EPA has been seeking White House guidance on how the court decision affects the small refinery waiver program.  

The court decision could affect biofuel blending requirements for 2020.

FBN’s Take On What It Means For The Farmer: As part of an ongoing saga between the EPA, big oil and big ethanol we believe that the recent court decision can force the EPA to recalibrate how the SRW’s are allocated which can be a positive for the farmer. Ultimately we think that reducing the number of SRW’s can deliver greater transparency and positively impact corn basis.                                                         


China’s Container Ports Working to Clear Shipping Backlog  

China's top container ports are loosening the backlog of cargoes stuck on their docks as workers return after coronavirus travel bans.  

Chinese travel bans prevented workers returning after the prolonged Lunar New Year holiday and forced ports to operate with skeleton staffing. 

China is the largest container cargo handler and processed around 30% of global traffic, or around 715,000 containers a day in 2019.

Turnaround times are starting to improve as container crane operators, customs officers, tugboat pilots and others return to work.

Some ports have managed to surpass year-ago processing rates in an effort to clear the backlog.

Chinese ports are also seeing fewer vessels divert to other destinations because of the backlog. 

Last week 61 container vessels redirected from China, down from a peak of 144 vessels in early February.

The coronavirus has impacted the global supply chains on virtually  everything; food to technology to clothes has been impacted.  

FBN’s Take On What It Means: Reducing port congestion can have a positive impact on global commerce but we are taking a neutral approach on what this actually means for the US farmer.  At the moment we are unsure how or if this translates to increased Chinese purchases of soybeans, corn, or wheat. However, we believe that this can be a positive for the US pork and poultry export programs.                                                                                                                         


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