Sources say that Trump EPA will shift at least half the waived biofuel obligation to big refiners

According to sources familiar with discussions, the Trump administration has settled on a plan requiring big oil refineries?to make up at least half?of?the biofuel blend volumes obligations that were waived in recent years under the Small Refinery Exemption Program.

This decision may not be welcomed by larger oil refiners who have claimed that additional blending requirements would increase their costs. It could benefit the biofuels industry by increasing demand for blending credit.

Oil refineries are required to mix billions of gallons of biofuels and ethanol into their fuels under the Renewable Fuel Standard. They can also purchase credits called RINs from companies that already do this. Small refineries may be exempted from these obligations if they can demonstrate financial hardship. It is a contentious issue between the fuel and agriculture industries whether or not to reallocate exempted blending requirements?to large refiners.

Biofuel groups are pushing the administration to reallocate all the exempted gallon, saying it's important to support biofuel producers as well as the farmers who grow their feedstocks. Refiners have warned that reallocation unfairly forces large?plants to cover smaller rivals. This could increase their compliance costs, and possibly raise pump prices.

This issue is of particular importance after the Trump Administration processed a backlog of waivers totaling over 2 billion gallons from 2023 to 2025. These requests represent a significant share of the overall requirements for renewable fuel blend.

Sources who declined to give their names when discussing the matter said that EPA officials have indicated in recent weeks they are settling on reallocating a minimum of 50% of the waived volume for these three years. The level could be higher. This reflects the shift from a preference for increased biofuels blends to a preference for more biofuels. Last year, the Environmental Protection Agency asked public opinion on options ranging from zero to 100 percent.

The EPA or the White House have not responded to comments about 'the reallocation plan. On Wednesday, the EPA sent to the White House its proposed biofuel blending quotas for 2026 and 2027. A final rule is expected by the end of the month, according to an EPA administrator who spoke at a?ethanol conference on Wednesday in Florida.

The agency has said that both the reallocation plan and the blending volumes would be released at once.

Sources cautioned, however, that no final decisions have been made. The approach may change before the official release.

Before the plan can be finalized, it must first be approved by White House. Reporting by Jarrett Renshaw, Editing by Chizu Nimiyama

(source: Reuters)