Key facts
- Farm and biofuel groups sent a letter to President Donald Trump urging him to reject expanded small refinery exemptions.
- The White House is considering roughly doubling the size of these exemptions, from about 950 million credits to as many as 1.8 billion.
- Groups warned that increased exemptions would harm rural economies by reducing demand for corn, soybean oil, and renewable fuels.
- Senator Joni Ernst criticized the potential expansion, stating it benefits oil companies at the expense of farmers and consumers.
A coalition of U.S. farm and biofuel organizations has formally requested President Donald Trump to reject a proposed significant expansion of small refinery exemptions from the nation's biofuel blending mandates. The groups argue that an increase in these waivers would severely damage rural economies by decreasing demand for American agricultural products and renewable fuels.
The White House is reportedly considering a plan to nearly double the number of exemption credits, potentially from 950 million to 1.8 billion. This move is seen as an effort to lower gasoline prices, which could benefit Republicans in upcoming midterm elections. However, the prospect of expanded exemptions has already led to a sharp decline in the prices of renewable fuel credits, known as RINs, as traders anticipate reduced demand for biofuels.
In a letter addressed to President Trump, the coalition, which includes the Renewable Fuels Association, Growth Energy, and the National Farmers Union, urged the administration to maintain exemptions for the 2025 compliance year at levels consistent with the Environmental Protection Agency's assumptions for 2026 and 2027 renewable volume obligations (RVOs). They warned that granting exemptions significantly above anticipated levels would 'decimate the demand signal' and could lead to a collapse in biofuel markets, reduced demand for corn and soybean oil, and further economic weakening in rural areas.
Senator Joni Ernst, a Republican from Iowa, has also voiced criticism, calling the potential expansion a 'handout to Big Oil' that would harm farmers and consumers while benefiting refiners. The Renewable Fuel Standard requires refiners to blend specific amounts of renewable fuel or purchase RINs. Small refineries can receive exemptions if they prove disproportionate economic hardship.