Biofuel groups welcomed US regulators' efforts to offset the impact of refinery exemptions from biofuel blend mandates but warned in a hearing today that the process could further delay long-awaited program updates.
The US Environmental Protection Agency (EPA) is soliciting feedback on how to ensure recent exemptions for small oil refiners from the biofuel program do not undermine demand for alternative fuels. But the agency has acknowledged that this work — which could mean steeper obligations on oil companies denied exemptions — will likely mean setting new biofuel quotas for 2026 and 2027 later than expected. That means currently challenging economics for crop growers and biofuel makers could last longer.
"The timely finalization of this rule is especially critical given the current pressure facing America's farm economy", said National Oilseed Processors Association president Devin Mogler at an EPA hearing Wednesday.
Under the Renewable Fuel Standard, oil refiners and importers must annually blend different types of biofuels, though small refiners can request program exemptions if they can prove economic hardship. The program is always politically and legally tricky for EPA to administer, but President Donald Trump's administration has a particularly tough needle to thread between farmers burned by tariffs and oil companies that say environmental regulations are threatening US refining capacity.
November goal out of reach
EPA had previously aimed to finalize new biofuel mandates before November, but that timeline has slipped. Some advocates at the Wednesday hearing seemed to concede that this timeline is now impossible, instead pushing regulators to finalize program updates at least before the end of the year. EPA said last month that it expected to finalize a rule "this winter 2025-2026".
The work ahead for EPA includes deciding whether to slash credits for biofuels made abroad or from foreign feedstocks, which would be a major change not just for fuel makers but also for the agency's own recordkeeping system. Officials have to decide too how to redistribute blend obligations lost to waivers after a proposal last month failed to signal one preferred path. And all that work would become tougher if a government shutdown that began today, sidelining most EPA staff, persists.
For companies banking on strong biofuel support, the risk is not just delayed gratification but the possibility that EPA mitigates the impact of its lateness by finalizing less-ambitious standards.
"If EPA delays, abandons, or otherwise scales back the proposed barriers for imported fuels and feedstocks, it must ensure that the overarching [mandate] is upwardly adjusted by an equivalent amount", said Thereza Cevidanes, a government affairs consultant speaking on behalf of fuel marketer groups like the National Association of Truck Stop Operators.
No easy path ahead
Companies that testified Wednesday were deeply divided on how EPA should factor in recent small refinery exemptions, giving regulators no obvious option that would speed the rulemaking process.
Oil refiners floated no reallocation, which they said would violate the law and hike fuel costs, while biofuel and farm advocates pushed for redistributing all post-2022 volumes to oil companies still in the program. Legal challenges, already trickling in as a response to individual decisions on small refinery applications, are guaranteed no matter what EPA decides.
The Iowa Renewable Fuels Association — which represents a mix of ethanol, biomass-based diesel, and biogas companies — floated one potential compromise. EPA has proposed hiking mandates in 2026 and 2027 to account for demand losses from exemptions, but the trade group suggested doing so over four years instead as a way to cushion the blow for oil companies.
