U.S. EPA to Rule on Backlog of Small Refinery Biofuel Exemption Requests, Zeldin Says

By Stephanie Kelly and Jarrett Renshaw

NEW YORK, May 15 (Reuters) – The Trump administration plans to rule quickly on dozens of small U.S. refineries’ pending applications for exemptions from biofuel-blending requirements, the head of the U.S. Environmental Protection Agency told lawmakers on Thursday.

There are 161 applications for exemptions from the U.S. Renewable Fuel Standard pending after the Biden administration refrained from acting on them. The EPA’s decision will have significant implications for the multi-billion-dollar credit market that underpins the biofuel program.

“None of these were getting approved at all in the last administration,” EPA administrator Lee Zeldin said in a congressional hearing. “We want to get caught up as quickly as we can.”

The Renewable Fuel Standard requires refiners to blend biofuels like corn-based ethanol into the nation’s fuel supply or buy renewable fuel credits, known as RINs, from those who do. But small refiners can petition the EPA to receive an exemption if they can show financial hardship.

In the first Trump administration, the EPA significantly increased the number of exemptions approved, driving down the price of the renewable fuel credits and angering the Farm Belt, which said the exemptions hurt a program that drove investment in the Midwest.

The Biden administration was critical of the exemptions and essentially let the applications linger without any decisions, resulting in the buildup.

Zeldin’s comments came as the EPA sent a proposed rule to the White House for review on the amount of biofuels oil refiners must blend into their fuel beginning in 2026.

It will be one of the first opportunities for the Republican president to show his stance on biofuels policy, which historically has pitted Big Oil and the Farm Belt against each other.

That dynamic shifted recently as a coalition of oil and biofuel groups recommended the EPA, which administers the volumes, propose federal mandates for biomass-based diesel blending for 2026 at 5.25 billion gallons, Reuters previously reported.

That would be a significant increase.

Soybean oil futures on the Chicago Board of Trade fell over 5% on Thursday on rumors the EPA’s proposed rule would set biomass-based diesel blending for 2026 at 4.65 billion gallons. Reuters could not confirm that figure.

The EPA was expected to propose a biofuels rule that covers both 2026 and 2027, Reuters previously reported.

The EPA’s previous rulemaking on renewable biofuels volume obligations finalized total federal volumes at 20.94 billion gallons in 2023, 21.54 billion gallons in 2024 and 22.33 billion gallons in 2025.

(Reporting by Stephanie Kelly and Jarrett Renshaw; Editing by Tomasz Janowski, Mark Porter, Chris Reese and Cynthia Osterman)