A coalition of U.S. farm and biofuel organizations sent a letter to President Donald Trump urging the rejection of a proposal to expand exemptions for small oil refineries. The groups, which include the Renewable Fuels Association, Growth Energy, and the National Farmers Union, argued that increasing these waivers would decrease demand for American crops and renewable fuels. The administration is reportedly considering these changes to address rising gasoline prices amid a conflict with Iran.
The Renewable Fuel Standard (RFS) is a federal program that mandates refiners and fuel importers to either blend renewable fuels like ethanol into the U.S. gasoline supply or purchase credits, known as Renewable Identification Numbers (RINs), to meet compliance. Small refinery exemptions (SREs) are designed to provide relief to smaller facilities that can prove they face disproportionate economic hardship. If a waiver is granted, those specific fuel volumes are removed from the market unless the obligation is later reallocated.
According to sources familiar with the matter, the White House is weighing a plan to nearly double the volume of these exemptions from approximately 950 million credits to as many as 1.8 billion. The prospect of this expansion has already led to a decline in the price of RINs as market participants anticipate lower demand. While the White House referred inquiries to the Environmental Protection Agency (EPA), the EPA did not provide an immediate comment. A final decision is expected before the end of August.
The debate over these exemptions centers on the financial impact on two major sectors. Oil refiners and farm advocates have long argued about whether consumers pay more when credit prices rise. Sen. Joni Ernst (R-IA) contended that the waivers function as a "handout to Big Oil" falsely marketed as relief at the pump. If the administration proceeds with the 1.8 billion credit threshold, the immediate effect would be felt in the renewable credit markets, where prices have already dropped. Over the longer term, the groups warn this could further weaken rural economies.
The outcome of this decision will set a precedent for how the RFS is managed during periods of high energy prices and geopolitical conflict. If the exemptions are granted, it may signal a shift toward prioritizing refinery costs over the domestic biofuel mandates established by the EPA in March. A final determination is expected before the end of August. Officials want to tame gasoline prices, which could help Trump's fellow Republicans retain control of Congress in November's midterm elections. Any finalized changes would impact the 2025 compliance year obligations.