In an effort to reduce harmful pollution, the U.S. enforces renewable fuel requirements. To help you understand what is going on and what we expect to happen in the future, our highly-experienced Kiplinger Letter team will keep you abreast of the latest developments and forecasts (Get a free issue of The Kiplinger Letter or subscribe). You'll get all the latest news first by subscribing, but we will publish many (but not all) of the forecasts a few days afterward online. Here’s the latest...
Uncle Sam will require a record amount of renewable fuel to be mixed into gas and diesel over the next three years, from 20.94 billion gallons in 2023 to 21.54 billion gallons next year and 22.33 billion in 2025.
The goal is to help absorb the rapidly expanding output of renewable diesel, processed from fats and oils to be chemically identical to diesel fuel. Tax credits at the federal and state levels have led to a 15-fold increase in the fuel since 2013.
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But the industry says the new targets still leave producers at risk of oversupply, possibly resulting in idle plants and curtailed investments, though not everyone agrees with this assessment. More than 20 facilities for the production of renewable diesel are now planned or under construction.
Conventional ethanol made from corn is taking a back seat as regulators lower ethanol quotas over the next three years, a blow to farmers and ethanol makers. One controversial proposal that did not wind up making the final cut: Incorporating electric vehicle (EVs) charging into the renewable fuel standard. But it’s possible regulators will revisit this idea in the future.
This forecast first appeared in The Kiplinger Letter, which has been running since 1923 and is a collection of concise weekly forecasts on business and economic trends, as well as what to expect from Washington, to help you understand what’s coming up to make the most of your investments and your money. Subscribe to The Kiplinger Letter.
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