WASHINGTON (RFD-TV) — The U.S. Environmental Protection Agency (EPA) has released a supplemental notice on proposed renewable fuel standards (RFS) for 2026 and 2027, aiming to address the impact of small refinery exemptions (SREs) on nationwide blending requirements.
The proposal lays out two options for reallocating volumes lost to SREs granted in 2023–2025:
- A 100-percent reallocation would add the exempted gallons back into the overall mandate,
- Or, a 50-percent reallocation would partially restore the volumes. EPA said the adjustments are designed to ensure the RFS program continues to drive biofuel use despite exemptions.
The EPA also detailed how it will project future SREs when setting percentage standards, which dictate how much renewable fuel must be blended into the nation’s fuel supply.
The supplemental proposal builds on EPA’s initial rulemaking earlier this year and comes after an August decision on refinery exemptions. Industry stakeholders are expected to weigh in heavily, as the outcome could significantly affect ethanol, biodiesel, and renewable diesel markets heading into the next compliance period.
Stakeholders across farming, biofuels, and refining will now weigh in before EPA finalizes the approach for 2026–2027. A virtual public hearing is scheduled for October 1, 2025, with registration required by September 24. Each participant will be limited to three minutes of testimony.
Ag Leaders Voice Support for the EPA’s Proposal
For agriculture, restoring waived gallons would help preserve demand for corn ethanol and soy-based biodiesel/renewable diesel, particularly after a year of uncertainty around SREs. The EPA signaled it wants to uphold congressional intent and protect RFS integrity, which could steady RIN values and bolster crush margins and coproduct demand.
The Renewable Fuels Association said Tuesday it is encouraged by the EPA’s new proposal to ensure that renewable fuel volumes lost to small refinery exemptions in 2023-2025 will be reallocated to future RFS standards.
RFA President & CEO Geoff Cooper said the group favors the complete reallocation to “maintain intended levels of renewable fuel consumption” and avoid a destabilizing surge of excess RINs, while still minimizing market disruption. Once the supplemental proposal is published in the Federal Register, a 45-day public comment window will open.
American Farm Bureau Federation (AFBF) President Zippy Duvall also voiced support Tuesday for the EPA’s supplemental proposal to adjust renewable fuel requirements in response to small refinery exemptions.
“Renewable fuels are an important tool in meeting America’s domestic energy needs,” Duvall said. “[The] EPA’s proposal takes a positive step toward strengthening the Renewable Fuel Standard and reinforcing the role farmers play in growing crops for biofuels. By addressing small refinery exemptions through reallocation, the agency is pursuing policies that promote energy independence through American-grown fuels.”
Duvall urged the agency to adopt the total reallocation approach, rather than a partial reallocation, arguing it would deliver the most substantial benefits.
“A full reallocation will help lower fuel costs for drivers while expanding economic opportunities in rural America,” he said.
