EPA proposes full reallocation of refinery biofuel exemptions
XLE•The EPA proposed reallocating 100% of biofuel obligations waived for 29 small refineries, with two options for assigning the volumes to 2026 and 2027. Public comments are due December 4, 2026.
1. Reallocation proposal
The EPA proposed requiring larger refiners to blend more biofuels over the next two years by reallocating all waived obligations for 29 small refineries. One option would split the additional 2025 exemption volume evenly between 2026 and 2027; the other would allocate it all to 2027. Comments are due December 4, 2026.
2. Exemptions and response
In August, the EPA granted 1.76 billion RINs worth of exemptions for the 2025 compliance year, including full exemptions for 18 refineries and partial waivers for 11. The agency said then that it would seek to reallocate the exempted volumes in future years. Renewable credit prices for biodiesel and ethanol fell slightly after the proposal.
3. Industry views
The exemptions drew criticism from biofuel producers and farm groups, who said they would reduce demand for ethanol and biodiesel. Refiners argued that compliance costs and elevated RIN prices justified relief. Renewable Fuels Association CEO Geoff Cooper said the plan, if finalized as proposed, would help offset demand losses for ethanol producers and farmers. The EPA said reallocation could require extending the 2026 compliance deadline of March 31, 2027.
