The EPA said it will propose by the end of October requiring larger refiners to produce biofuels equal to the difference between the actual and estimated volumes exempted in the 2026 and 2027 obligation years.
This would ensure the issue of how the overall production quota is met gets addressed before the November midterm elections. But the plan would remain subject to public scrutiny and a regulatory process that does not guarantee it will take effect.
Ethanol blending credits, known as RINs, rose 16% to $2.07 each as of 3:45 p.m. ET, up from $1.78 on Thursday, according to market data.
Biofuel trade group Growth Energy said the exemptions appeared difficult to justify given refiners' recent profits, arguing that small refineries should receive relief only when they can demonstrate “disproportionate economic hardship.”
The group praised lawmakers for fighting to preserve the biofuel quotas finalized earlier this year and said it would work with EPA “to fully account for lost biofuel gallons and make producers and farmers whole.”
The American Petroleum Institute, the nation's largest oil trade group, said the larger-than-expected package of exemptions undermined regulatory certainty. API CEO Mike Sommers said granting exemptions “significantly above” EPA's projection would be “a significant step backward.”
API also opposed shifting the exempted obligations to larger refiners in future years.
“Both actions would inject uncertainty into the fuels marketplace,” Sommers wrote, adding that “new compliance surprises” would move “in the wrong direction at precisely the wrong moment.”
Farm-state lawmakers have warned that broad exemptions could depress demand for crops and undermine the biofuel industry, while refiners argue that the mandates can impose steep costs when compliance credits are expensive.
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