Sources say that the Trump administration will delay a decision on reallocation and biofuel exemptions, but rule on requests for biofuel exemptions.

Two sources familiar with Trump's plans say that the administration will rule as soon as Friday on the growing backlog for small refiners who are seeking exemptions from biofuel laws. However, the decision about whether the larger refiners must make up some of the exempted gallons is still pending.

Sources said that the U.S. Environmental Protection Agency will rule on a few of the 195 small refinery exemption requests pending since 2016, on Friday. Sources briefed about the decisions said that there will be mixed results, with partial denials and some partial approvals. However, it will not be an overwhelming victory for small refiners.

The administration will likely issue a supplemental regulation as soon as next week, asking for public comments on whether they should require larger refiners in a reallocation process to compensate for the exempted gallon.

The EPA announced earlier this year it would require larger refiners make up for future gallons exempted, but it was silent about how it would handle exempt gallons of the dozens backlogged requests.

Sources said that the supplemental rule would include a variety of options to see how the market might react.

The way the administration handles exemption requests and reallocation issues could have a significant impact on the oil and agriculture industries. It will affect the prices of commodities, from soybeans and corn to renewable diesel and gasoline.

Credit prices, as well as soybean and ethanol prices, have fallen in the past due to widespread exemptions.

(source: Reuters)