The Environmental Protection Agency on Tuesday issued a long-awaited proposal on the thorny issue of exempting some small oil refiners from US biofuel-blending mandates,
The agency is proposing two options – either full reallocation, or 50% reallocation for small refinery exemptions, known in the industry as SREs, that were granted in full or in part for 2023 and 2024, as well as those projected to be granted for 2025.
During a public comment period, the agency will consider proposals for a different percentage reallocation.
Clean Fuels Alliance America, a leading trade group for renewable diesel and biodiesel producers, said the proposal was a victory for farmers and renewable fuel producers.
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The EPA move follows opposition from makers of corn ethanol, renewable diesel and other sustainable fuels to Biden-era mandates under the Renewable Fuel Standard. The biofuel industry felt those renewable volume obligations were set far too low and hurt production and profits.
The question of whether to give smaller refiners claiming economic hardship due to biofuel policy plagued President Donald Trump during his first term in office, with oil and ag industry groups facing off at tense White House meetings at the time. The matter puts Trump in a tricky spot. He is a self-avowed fan of both famers and petroleum. The EPA also said it will update its estimate of exempted gallons for 2026-27.
The EPA proposal, which now faces public feedback before being finalized, would ensure that mandated biofuel volumes set by the agency will “actually be met," said Paul Winters, Clean Fuels director of public affairs and communications.
“It will take farmers and renewable fuel producers fighting to secure the win, but the EPA is issuing a solid proposal,” Winters said.
The American Petroleum Institute opposes both the broad issuance of waivers and the reallocation of exempted volumes.
“API opposes widespread small refinery exemptions as they pick winners and losers among refiners and risk higher costs for consumers. Any exempted volumes should not be reallocated because doing so would further distort the market. We look forward to making our case to EPA to protect consumers and ensure a fair, predictable program for all stakeholders," said API Vice President of Downstream Policy Will Hupman.
EPA plans to hold a virtual public hearing on Oct. 1 for the proposed rule.
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