By Siddharth Cavale
CHICAGO, Oct 13 (Reuters) – The US Environmental Protection Agency proposed on Tuesday to make larger refiners blend more biofuels into their products over the next two years, a move that will likely appeal to farm-state voters ahead of November’s congressional elections.
The proposal would help offset concerns about lost demand for ethanol producers and farmers after the EPA announced in August it would waive renewable fuel volume obligations for 29 small refineries that argued the requirements would cause economic hardship.
The EPA proposed reallocating 100% of those waived fuel volume obligations and is seeking public comment after putting forward two approaches. One would split the additional 2025 small refinery exemption volume evenly between the 2026 and 2027 compliance years, while the other would allocate all of it to 2027.
Comments are due by December 4, 2026, the EPA said in a statement.
Renewable credit prices for biodiesel and ethanol fell slightly on the news, according to a refinery trader at the OPIS biofuels conference in Chicago.
The EPA in August decided to grant 1.76 billion RINs worth of small refinery exemptions for the 2025 compliance year, including full exemptions for 18 refineries and partial waivers for 11 others. At the time, the agency said it would seek to reallocate the exempted volumes to other refiners in future years to preserve overall biofuel blending requirements.
The exemptions, the largest ever issued under the Renewable Fuel Standard, drew sharp criticism from biofuel producers and farm groups, which argued they would reduce demand for ethanol and biodiesel and undermine markets for agricultural feedstocks.
Refiners said compliance costs and elevated RIN prices justified relief for facilities facing economic hardship.
“While we believe most of the exemptions were unjustified, EPA’s reallocation plan, if finalized as proposed, will help offset the demand loss for ethanol producers and farmers,” said Geoff Cooper, CEO of the Renewable Fuels Association, which represents ethanol producers.
The EPA also said reallocating the waived obligations could require extending the 2026 compliance year deadline of March 31, 2027.
(Reporting by Siddharth Cavale in Chicago, Editing by Franklin Paul and Nia Williams)
Comments