Sources say that the Trump administration is unlikely to finalize biofuel quotas for 2026 this year.

Three sources familiar with the matter say that the Trump administration will not finalize the 2026 biofuel blending quotas by the end of the year. This extends the uncertainty over a policy closely monitored by rival oil and agriculture sectors.

The White House's biofuels policy is being impacted by a number of decisions that are interconnected.

The moves together have led to expectations that the administration will look for a wider - but elusive – agreement between rival oil interests and agricultural ones.

Two sources said that the Environmental Protection Agency (EPA), which oversees biofuels policies, has scheduled meetings with stakeholders to discuss the quota rules early next year. This is a sign the issue would be pushed back into next.

According to a third source, the EPA is unlikely to make a decision by the end this year.

Sources spoke anonymously about the issue.

The EPA said it was still reviewing comments from the public on volume requirements, and refused to give any indication of timing. The volume mandates fall under the Renewable Fuel Standard, the federal program which mandates that?biofuels like ethanol and biodiesel? be blended into the U.S. gasoline supply.

The delay in finalizing these mandates is crucial because fuel producers, farmers, and commodity traders use the mandates to lock in contracts, hedge volatile energy and crop markets, and justify investments in new production capacities.

Companies say that without clarity about next year's quotas they are forced into delaying deals and spending decisions which will affect biofuel production and margins.

The White House is looking for common ground

Earlier this summer, the EPA proposed increasing total renewable fuel requirements by 2026 and 2027. It also increased targets for advanced biofuels, biomass-based diesel, and tightened rules for using imported biofuels.

EPA?was initially expected to finalize its proposal by the end October.

Sources said that the quotas are increasingly being merged into a "broader set" of energy and agricultural policies the administration will be weighing over the next few weeks. These issues may appear to be separate, but they could actually be tied together as part of an agreement between oil and agriculture rivals. These 'issues' include legislative attempts to allow gasoline with higher ethanol blends to be sold year-round, a proposal penalizing imported biofuels and raw materials, and unresolved issues over if and how large refiners would have to compensate for gallons that were exempted under the RFS. In recent weeks, the White House held a number of meetings with oil and agriculture groups to try to find a common ground.

When asked if these issues were becoming more interconnected, the EPA responded that it was "committed" to strengthening American energy and agricultural security. (Reporting and editing by Jarrett Renshaw)

(source: Reuters)