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UPDATE 1-Refining CEOs met with Trump, sought biofuels policy concessions -sources

Jarrett Renshaw and Stephanie Kelly

-sources@ (Updates with details, background)

Sept 12 (Reuters) - The chief executives of two of the largest U.S. refining companies met with President Donald Trump on Wednesday seeking concessions in ongoing negotiations over biofuels policy, according to two sources familiar with the discussions, a turn that will complicate the administrations hopes of helping hard-hit corn farmers.

Valero Energy CEO Joe Gorder and Marathon Petroleum CEO Gary Heminger asked Trump for solutions to help the refining industry cope with the cost of rising biofuel blending mandates, including potentially capping the price of blending credits refiners must acquire to comply. The corn industry has been dead-set against price caps for blending credits, called RINs, arguing they would undercut the economic incentive for blending biofuels.

A Marathon spokesman confirmed the meeting but declined to comment on what was discussed.

"The intent of the meeting was to engage with the president on policies that impact our business and consumers who rely on them. We're always looking to find win-win solutions between the fuel manufacturers and the ethanol industry, which are going to be beneficial for consumers," spokesman Hamish Banks said.

The White House and a representative for Valero were not immediately available to comment.

Trump has struggled to satisfy warring agricultural and oil interests, key political constituencies that helped elect him in 2016 and which he hopes to retain heading into the 2020 election.

The White House since last week has been trying to win support from both sides for a 5% increase to blending mandates in 2020 above the currently proposed volumes under the U.S. Renewable Fuel Standard. The increase is meant to compensate biofuel producers and corn farmers for the administrations decision in August to exempt 31 oil refineries from their requirement to blend biofuels under the RFS.

The agriculture industry says the administrations broad use of waivers has undermined the market for corn-based ethanol at a time farmers are already losing export sales from the U.S. trade war with China.

So far, biofuel producers have balked at the administrations offer of a one-time increase in mandates, instead pushing for a structural change to biofuel policy that would compensate them for future exemptions to refiners as well.

The White House is expected to meet with U.S. Senators from key farm states later on Thursday and senators representing oil-producing states on Friday to continue discussions on the issue, the sources said. (Reporting by Jarrett Renshaw and Stephanie Kelly, Editing by Rosalba O'Brien)