Sources told Reuters this week that President Donald Trump has instructed his Environmental Protection Agency to deny dozens of requests from oil refiners for retroactive waivers. The financial relief would be a way for the administration to assuage refiners that say requirements to blend billions of gallons of biofuels into their fuel are too pricey.
It was not immediately clear which refiners would be eligible for cash aid, or how the EPA would provide the financial relief. Details were still being discussed, the sources said.
EPA did not immediately respond to requests for comment.
Bloomberg earlier reported the development.
Under U.S. law, refiners are required to blend biofuels into the fuel mix, or buy tradable credits from those that do. Refiners can also apply for exemptions to the laws if they can prove compliance would financially harm them.
The waivers have been a battleground for the influential oil and corn lobbies, both major constituencies for Trump as he seeks re-election on Nov. 3. Ethanol advocates say waivers cut into demand for the corn-based fuel, but the oil industry denies that.
The Trump administration has quadrupled the number of exemptions given out to refiners, causing outrage in farm states, such as Iowa.
In January, though, an appeals court ruled that waivers granted to small refineries after 2010 could only be approved as extensions of pre-existing waivers. Most recipients of waivers in recent years have not continuously received them, casting doubt on the exemption program. Reporting by Stephanie Kelly; Editing by Sandra Maler and Grant McCool