The Trump administration may nearly double small-refinery exemptions from the nation's biofuel mandate, taking them from 990 million credits to as many as 1.8 billion, sources have told Reuters. Officials expect to decide before August ends.
Trump met with his energy, environment and agriculture chiefs to discuss shielding biofuel producers from the fallout of the exemptions, according to people familiar with the meeting. According to the sources, the White House wants to expand the small-refinery exemption program substantially, a push that has already angered the farm belt. The sources said officials are trying to hold down pump prices, which have climbed since the war with Iran began, to help Republicans keep control of Congress in the November midterms.
Just the prospect of a bigger waiver program has knocked down prices for RINs, the renewable fuel credits that refiners buy to prove compliance, as traders bet biofuel demand will soften. It's a long-running dispute: refiners and farmers disagree on whether higher RIN prices ultimately get passed on to consumers.
How the waiver program works
The Renewable Fuel Standard sets blending quotas: refiners and importers must mix a required volume of ethanol and biodiesel into the fuel they sell, or purchase RINs instead to prove they hit the target. The exemption program lets small refineries skip that obligation if they can show compliance would cause economic hardship. Granting an exemption effectively takes that fuel volume out of the market, unless regulators later shift the obligation somewhere else. At the meeting, officials floated making up those lost gallons in the annual quotas set for future years, though how they would do that remained unclear.
Farm groups push back
In a letter to Trump, a coalition that included the Renewable Fuels Association, Growth Energy and the National Farmers Union pressed him to reject the expansion, arguing that a wave of new waivers would hit rural America by pulling demand away from crops and renewable fuels. They want any 2025 compliance-year exemptions capped at the volume the EPA already built into its 2026 and 2027 blending targets, set in the agency's March rule. Exemptions beyond that would "decimate the demand signal," the groups said, warning the consequences "would be severe and immediate" and could cause biofuel markets to collapse while cutting demand for corn and soybean oil.
Senator Joni Ernst, an Iowa Republican, called the potential expansion "a handout to Big Oil falsely marketed as relief at the pump." She said the exemptions would crush demand for corn and soybean oil while benefiting refiners already posting record profits, adding that "farmers lose, consumers get nothing, and oil companies rake in the cash."
A White House official said the administration "will make a decision that is best for consumers, farmers, and energy supply chains."
