Trump, Iowa governor discuss biofuels: governor's office

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WASHINGTON (Reuters) – Iowa Governor Kim Reynolds had a “very positive” call with U.S. President Donald Trump about the importance of biofuels to the corn-growing state on Tuesday, at a time when the administration is eyeing changes to the quantities it demands suppliers use.

Reynolds had a “very positive and productive call” that discussed the “importance of renewable fuels to the Iowa economy,” said Brenna Smith, a Reynolds spokeswoman.

“The president reiterated his commitment to renewable fuels,” she added.

U.S. law requires fuel companies to add biofuels like ethanol to the nation’s fuel supply. The Trump administration is considering lowering the level required, a worry for corn-growing states like Iowa.

On Tuesday, Environmental Protection Agency (EPA) chief Scott Pruitt met with senators to discuss the issue. In a statement sent to the press after the meeting, Iowa Republican Senator Joni Ernst said she had expressed “significant concerns over the agency’s recent action to potentially set biodiesel volumes” for 2018 and 2019 at “substantially lower volumes.”

Senator Charles Grassley, an Iowa Republican, said he told Pruitt during the hour-long meeting “that supporting biofuels isn’t just good policy. It’s also what President Trump promised.”

The White House referred questions to the EPA, which declined to comment.

The renewable fuels industry has been ratcheting up pressure in Washington in response to actions from the EPA it sees as threatening the more than decade-old biofuels program designed to boost use of ethanol and other renewables and reduce carbon emissions.

Last month, the agency said it was looking to cut 2018 biodiesel blending requirements, roiling markets and drawing criticism from the country’s farm belt. In July, it proposed cutting total volumes of all renewable fuels use for next year.

The environmental watchdog is also considering a plan to allow ethanol exports to qualify for credits under the U.S. renewable fuel program. The move would dramatically increase the pool of credits and drive their price down.

U.S. merchant refiners, who must buy the credits to comply with the law, have long complained that their cost is driving them out of business.

A group of 33 senators wrote to Trump this week urging the EPA to maintain levels for 2018 and increase its proposed 2019 biodiesel requirements.

Late on Tuesday, the Senate Committee on Environment and Public Works postponed a planned hearing for Wednesday to consider the nominations of four EPA officials.

Reporting by David Shepardson and Emily Flitter; Editing by Chizu Nomiyama and Rosalba O’Brien

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