Adds RFA, Grassley comments to show senators also may defer waiver changes.
US lawmakers who have struggled to agree on fuel-market reforms could defer a decision on whether to limit oil refiners' ability to skirt a biofuel mandate program, according to the head of a major ethanol trade group that backs such restrictions.
The US House of Representatives tasked a "rural domestic energy council" of more than 20 Republican lawmakers with drafting legislation that would allow year-round sales of gasoline with up to 15pc ethanol (E15). But the so-called E15 council has missed its deadlines for reaching agreement, in part because some refiners oppose limiting hardship waivers from annual biofuel quotas that currently are available to small refineries.
There is "increased conversation" in the House and Senate around considering exemption changes later, Renewable Fuels Association chief executive Geoff Cooper told Argus in an interview. "Based on some things we're hearing, there is some talk of a new strategy to move immediately on pieces where there is consensus."
That would be a major shift, as debate among lobbyists and lawmakers for months has revolved around not just exempting E15 gasoline from summertime smog rules, but also around changing the small-refinery exemption program that has frustrated farm advocates and oil majors alike.
The US requires oil companies to annually blend biofuels or buy Renewable Identification Number (RIN) credits from those that do, while letting refineries that process no more than 75,000 b/d of crude request hardship waivers that can save them tens of millions of dollars. New federal mandates are expected this month.
An earlier bill negotiated in part by the Renewable Fuels Association would have limited exemptions to companies with limited collective refining capacity, cutting off larger firms that currently can win waivers for smaller units they own. After midsize refiners like Delek and Par Pacific protested, the House task force has floated letting small refinery owners of various sizes seek waivers but capping the total amount of gasoline and diesel that can be exempted each year.
The Renewable Fuels Association would prefer that Congress pass changes to E15 availability and biofuel mandate exemptions together, "but we really can't allow that to further hold up the E15 legislation", Cooper said.
"One of the frustrations I have is dealing with these refineries and the RINs and things like that that are holding up getting E15 by legislation", US senator Chuck Grassley (R-Iowa) said Monday at a Senate agriculture committee hearing.
Cooper suggested that the best "starting point" for negotiations on a "skinnier" bill is an earlier proposal that would allow year-round E15 sales and would compensate some unnamed small refinery owners for past compliance by providing them with special program credits that do not expire. A framework shared with Argus last month estimated this provision could mean regulators give those companies 363mn special RINs.
That slimmer bill nearly passed Congress in 2024 but ran into headwinds last year when the American Petroleum Institute pitched the White House and biofuel advocates on a larger package that also would include limits on small refinery exemptions. The group was frustrated by generous waivers President Donald Trump's administration has given some smaller competitors and wanted to prevent regulators from making companies without exemptions blend more biofuels in future years as an offset.
The offices of US representatives Randy Feenstra (R-Iowa) and Stephanie Bice (R-Oklahoma), the co-chairs of the E15 council, did not immediately respond to requests for comment. The American Petroleum Institute also did not respond when asked whether any E15 bill would need exemption changes to win its support.
More details on the council's plans could come "next week", when the House returns from recess, Cooper predicted.
Iran adds fuel to E15 talks
The debate around E15 has shifted drastically since the US war in Iran has sent crude futures surging, leaving higher-ethanol blends as one way to temper rising pump prices. The vast majority of gasoline sold in the US contains 10pc ethanol.
A group of midwestern states and the Renewable Fuels Association have asked the Trump administration to issue emergency waivers allowing E15 sales across the US this summer.
The Trump administration issued emergency waivers last year allowing summertime E15 sales and halting a transition in the midcontinent to a costlier fuel blend, but only days before summer driving season. Cooper urged regulators to signal plans sooner this year — at least by the end of March — to avoid supply-chain disruptions.
Critics of the biofuel mandates likewise see opportunity. The Fueling America Jobs Coalition, which includes independent refiners and unions, has lobbied the administration to set less aggressive biofuel quotas as a strategy to cut RIN costs that spill into retail fuel prices.
