The U.S. Environmental Protection Agency (EPA) has proposed a new rule that would require large refiners to blend more biofuels into their products over the next two years. The move, announced on October 13, aims to address concerns over lost demand for ethanol and biodiesel after the EPA granted exemptions to 29 small refineries in August. The exemptions, worth 1.76 billion renewable identification numbers (RINs), were the largest ever issued under the Renewable Fuel Standard (RFS).
The EPA's proposal seeks to reallocate 100% of the waived fuel volume obligations through two approaches: splitting the additional 2025 exemption volume evenly between 2026 and 2027, or allocating all of it to 2027. The decision has been met with approval from Iowa's farm groups, which have long advocated for stronger biofuel blending requirements. Iowa, the nation's largest ethanol and biodiesel producer, stands to benefit significantly from the rule change.
Iowa Agriculture Secretary Mike Naig called the decision an 'important step toward delivering the certainty our farmers and biofuel producers need to invest and grow.' Steve Kuiper, president of the Iowa Corn Growers Association, praised the Trump Administration and EPA for 'sending a strong market signal that energy independence matters.' Lee Brooke, president of the Iowa Soybean Association, noted that the decision would provide 'greater certainty and much-needed domestic demand for soybeans,' particularly amid a challenging farm economy.
The EPA is seeking public comment on the rule, with comments due by December 4. While biofuel producers and farm groups have welcomed the proposal, refiners have argued that compliance costs and elevated RIN prices justified the exemptions granted earlier. The EPA's final decision could have significant implications for both the agricultural and energy sectors ahead of the November congressional elections.