The Environmental Protection Agency proposed that larger refiners take on 100% of the biofuel blending obligations it waived for small refineries in August. The waived volume totals 1.76 billion Renewable Identification Numbers (RINs), and the agency is taking public comment through December 4, 2026.
Two options for the 2026 and 2027 compliance years
The EPA put forward two approaches. One would split the additional 2025 small refinery exemption volume evenly between the 2026 and 2027 compliance years. The other would place all of it in 2027.
The agency also said the extra volume could require extending the 2026 compliance deadline past March 31, 2027.
What the August exemptions did
In August, the EPA granted 1.76 billion RINs worth of small refinery exemptions for the 2025 compliance year. Eighteen refineries received full exemptions and 11 others received partial waivers, 29 in all. The agency described the relief as going to facilities facing economic hardship. At the time, it said it would seek to reallocate the exempted volumes to other refiners in future years to preserve overall biofuel blending requirements.
The exemptions were the largest ever issued under the Renewable Fuel Standard. Biofuel producers and farm groups criticized them sharply, arguing they would cut demand for ethanol and biodiesel and weaken markets for agricultural feedstocks. Refiners had argued that compliance costs and elevated RIN prices justified relief for the facilities involved.
Reaction
Geoff Cooper, CEO of the Renewable Fuels Association, which represents ethanol producers, said: "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."
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 proposal arrives ahead of November's congressional elections.
