The Trump administration is set to announce a deal to mitigate concerns over the use of small refinery exemptions (SREs) from the Renewable Fuel Standard that will reallocate waived gallons to other obligated parties.

According to sources briefed on the deal, the reallocation is included in a package that also includes fixes for E15 labeling and biofuel infrastructure funding from the Department of Agriculture. It does not, however, contain additional volume increases to annual blending targets (beyond what will be included through reallocation) or a possible rebate program if prices for biofuel mandate credits — Renewable Identification Numbers (RINS) — exceed a certain price threshold.

The White House briefed stakeholders on the news Thursday evening and plans to announce details Friday morning.

The move responds to a major request from the biofuels sector seeking to maintain gallons of ethanol demand the industry said was lost to the SREs. The reallocation will be addressed through a supplemental rulemaking that will need to be completed in time for the Nov. 30 deadline for the agency to finalize annual Renewable Volume Obligations.

The announcement brings to a close months of negotiations between the administration, pro-oil and -biofuel senators on Capitol Hill, and stakeholder groups on both sides of the issue. President Donald Trump was said to be ready to announce a deal in previous weeks, but held off as talks continued before ultimately wanting to get the issue off his desk. The issue also proved to be a political problem for a president seeking to win over rural votes in his upcoming reelection bid.

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