EPA Grants Refinery Exemptions, but Moves to Protect Biofuel Demand

The Environmental Protection Agency (EPA) has granted exemptions to 29 small refineries from nearly 1.8 billion renewable fuel credits, raising concerns for farm country. The exemptions cover 1.76 billion Renewable Identification Numbers (RINs), exceeding the EPA's original projection of 990 million RINs.

The concern is that fewer obligations can mean less demand for renewable fuel and ultimately less demand for corn and soybeans used to make it. Farmers and biofuel producers have been watching the EPA decision closely, as the issue goes straight to one of the largest domestic markets for their crops.

EPA has committed to put those credits back into the nation's fuel-blending requirements, which could prevent a major hit to demand for corn ethanol and soybean-based biofuels. The agency will propose reallocating 100% of the exempted volume into the 2026 and 2027 Renewable Volume Obligations (RVOs) by the end of October.

The reallocation plan aims to make other obligated petroleum companies pick up the renewable fuel volume that otherwise could have disappeared because of the refinery exemptions. This move is seen as a way to prevent a net loss in renewable fuel demand and support farm income, jobs, reduced dependence on foreign oil, and lower-cost fuel for consumers.