Trump EPA to Shift Waived Biofuel Quotas to Big Refiners

The United States Environmental Protection Agency (EPA) is moving forward with a plan to require major oil refineries to cover at least half of the biofuel blending volumes previously waived for smaller facilities. This decision follows a period of intense debate over the Small Refinery Exemption program, which has seen billions of gallons of blending obligations waived in recent years. For companies operating in the global renewable energy market, such as MH Ethanol Co.,Ltd., the shift in regulatory policy could significantly impact the demand for blending credits and the overall market for ethanol. Under the federal Renewable Fuel Standard, refineries must either blend renewable fuels into their gasoline and diesel or purchase credits known as RINs. Small refineries can apply for exemptions if they prove that compliance would cause them significant economic hardship. However, the Trump administration has recently processed a backlog of these requests, totaling more than 2 billion gallons for the 2023 to 2025 period. Sources familiar with the internal discussions report that the EPA has settled on reallocating at least 50% of these waived volumes to larger refiners, a move that could potentially increase costs for major oil companies while providing a boost to the biofuel industry. This decision marks a shift toward supporting increased biofuel blending after the agency previously considered a wider range of options. While the final percentage could still increase, the plan must receive formal approval from the White House before it is finalized. An EPA administrator noted at a recent industry event that the agency expects to release the final rule, including the reallocation plan and new blending quotas, by the end of March. Although the current proposal signals a clear direction for federal fuel policy, officials cautioned that the approach remains subject to change until the formal release.