President Trump’s search for a way to address refiners’ complaints about the Renewable Fuel Standard remained at an impasse following a meeting with biofuel and refining industry executives where the idea of a temporary cap on ethanol credits was quickly rejected by producers.

During the hour-long discussion, Trump suggested the two-year limit on prices of Renewable Identification Numbers, coupled with expanded usage of ethanol as a possible compromise, sources said. 

The cap on RINs was a non-starter with the ethanol industry because they believe it would dampen production and corn demand. But industry officials came away from the meeting believing that Trump wants to increase ethanol usage and understands the importance of RIN prices to ethanol demand. RINs are the credits that refiners use to comply with biofuel usage requirements. 

Trump wants to hold another meeting on the ethanol issue and review economic studies on issues such as the impact of the year-round use of E15, a blend of 15 percent ethanol and gasoline, on RIN prices, sources said. EPA would have to provide a vapor-pressure waiver to allow E15 to be sold during the summer. 

“Both sides made their case and the only agreement was to look at economic studies for impact,” said Sen. Chuck Grassley, one of four GOP senators who attended the meeting. “No decisions were made.”

Grassley said an “emerging solution appears to be year-round E15 ... Low corn prices are already squeezing farmers’ bottom lines. If the RFS were undermined with a RIN price cap or waiver, that would be made even worse.” 

A biofuel industry source described the meeting as “heated” and “combative.” But Thomas Nimbley, CEO of refiner PBF Energy, said it was a “productive conversation” and that Trump was “committed to continuing the conversation.” 

“It is hugely important to our national security and a reliable gasoline supply to have modest reforms to the Renewable Fuel Standard that can protect hardworking union jobs in the Northeast and across the country,” Nimbley said. 

At the outset of the meeting, Trump didn’t seem to know what E15 was, but as the meeting progressed he expressed interest in seeing increased use of E15 as a solution both sides could accept, said one source.

A continued impasse favors the ethanol industry, which is trying to prevent changes in RIN policy while seeking to get EPA to provide a waiver for the Reid vapor pressure standard. 

“The President very clearly understands that the path forward is to allow sales of E15 year-round, promote growth, and put more RINs on the market,” said Emily Skor, CEO of Growth Energy, an ethanol trade group that had several board members at the meeting. 

Brooke Coleman, executive director of the Advanced Biofuels Business Council, said the refining industry keeps “pushing a RIN cap that would throw the RFS into chaos and destroy any hope of revitalizing farm income under the Trump administration. 

“That’s not going to happen, but the president seemed to fully appreciate how easily lifting regulations on E15 sales could pour RINs into the market, which promotes growth on all sides.”

EPA Administrator Scott Pruitt participated in the meeting as well as Deputy Agriculture Secretary Steve Censky and four GOP senators who also were involved in an earlier meeting on Tuesday: Grassley, Joni Ernst of Iowa, Ted Cruz of Texas and Pat Toomey of Pennsylvania. 

The biofuel industry leaders included Jeff Broin, CEO of Poet, and Todd Becker, CEO of Green Plains Renewable Energy; Rick Schwarck, president and CEO, Absolute Energy, all ethanol producers; Bill Horan, a board member of Western Iowa Energy; and Randy Howard, CEO of biodiesel producer Renewable Energy Group. 

The refining industry executives included Joe Gorder, CEO of Valero, as well as Nimbley of PBF Energy. A refinery union representative also was included.

A University of Illinois analysis released this week indicated that the Reid vapor pressure waiver that biofuel producers are seeking would have only have a modest impact on ethanol demand, while a cap on RIN prices could significantly reduce ethanol production. 

The RVP change "would give a boost to E15 use but the gains in ethanol use would likely be small in the short-run," the analysis says. "Longer-run gains are uncertain and would depend on addressing several other factors that contribute to holding back the growth in usage of higher ethanol blends. By comparison, a 10 cent RINs cap would have large impacts on biofuels production and use in the U.S."