The US Environmental Protection Agency has proposed requiring larger refiners to blend more biofuels over the next two years.
The plan responds to concerns about lost demand for ethanol and biodiesel. In August, the EPA waived renewable fuel obligations for 29 small refineries. That covered the 2025 compliance year. Eighteen refineries received full exemptions. Eleven got partial waivers. The waivers total 1.76 billion renewable identification numbers, or RINs. The exemptions are the largest ever issued under the Renewable Fuel Standard.
Now the EPA proposes to reallocate 100% of those waived volumes to other refiners. In August, the agency said it would seek to reallocate the exempted volumes to preserve overall biofuel blending requirements. The proposal offers two approaches. One would split the volume evenly between the 2026 and 2027 compliance years. The other would assign all of it to 2027. The EPA also said reallocation could require extending the 2026 compliance year deadline of March 31, 2027.
Public comments are due by Dec. 4, 2026.
Biofuel producers and farm groups criticized the exemptions. They argued the waivers would cut demand for ethanol and biodiesel and weaken markets for agricultural feedstocks. Refiners said compliance costs and high RIN prices justified relief for facilities facing economic hardship.
Geoff Cooper, CEO of the Renewable Fuels Association, said most of the exemptions were unjustified. The group represents ethanol producers. He said the reallocation plan would help offset lost demand for ethanol producers and farmers if finalized as proposed.
Renewable credit prices for biodiesel and ethanol fell slightly on the news, according to a refinery trader at the OPIS biofuels conference in Chicago.
