Ethanol Blog

LINCOLN, Neb. (DTN) -- With the Trump administration just days away from announcing a decision that could grant nearly two billion gallons in small-refinery exemptions to the Renewable Fuel Standard, agriculture and biofuels groups warned President Donald Trump on Thursday that doing so would damage agriculture and the rural economy.

With the possibility the U.S. Environmental Protection Agency could grant around 1.8 billion gallons worth of exemptions, biofuels and farmer interest groups who are part of a rural voting block that helped elect Trump twice told the president in a letter to "stand strong against" attempts to undermine the RFS.

"History is unambiguous: The last time the Environmental Protection Agency granted SREs at the scale being contemplated, the biofuel industry lost $6.4 billion, renewable fuel credits collapsed by up to 78% and gas prices rose 12%," the groups told Trump.

"RIN prices clearly don't drive gas prices. The only winners were refiners in a sector that today is reporting record profitability, even as American farmers face down another year of negative incomes."

The letter is signed by Clean Fuels Alliance America, Growth Energy, National Corn Growers Association, National Oilseed Processors Association, Renewable Fuels Association, Bunge, Darling Ingredients, Green Plains, International Flavors & Fragrances Inc. (IFF), Novonesis, Poet LLC, National Farmers Union and the American Soybean Association.

DESTROY BIOFUEL DEMAND

They told Trump reducing blending volumes in the RFS program with SREs will "destroy the biofuel demand that is now working to restore the rural economy" and reduce fuel costs for drivers.

"Your administration's actions to date to restore certainty to the Renewable Fuel Standard have provided a strong signal that the United States is committed to expanding domestic fuel production, supporting farm income, and reducing reliance on foreign energy sources," the letter said. The 2026 and 2027 RFS volumes finalized in March 2026, the groups said, represented a "decisive, market-defining commitment" to American biofuels, domestic agriculture and the rural economy.

"Since finalization of the Set 2 RVO, more than a dozen companies have increased production or announced investments in crush capacity, renewable diesel and sustainable aviation fuel infrastructure, with executives and company statements directly citing RFS policy as the driver," the letter said.

AGRICULTURE INVESTMENTS

They said the U.S. soybean processing industry has invested over $7 billion to expand crushing capacity by more than 25%, which is enough to process two-thirds of the soybeans grown in the U.S.

The groups pointed to EPA estimates that the 2026 RVO will create $31 billion in value for American corn and soybean oil. USDA estimates a $3 billion to $4 billion increase in net farm income directly attributable to the Set 2 RVO, supporting more than 100,000 new agricultural and manufacturing jobs.

"Today, these gains are at risk from pending SREs," the letter said.

"As your administration considers pending SRE decisions for the 2025 compliance year, we urge you to keep any SREs granted consistent with the projected level of exempted volumes that were used by EPA to establish the current program structure in the final Set 2 RVO, with the reallocation of any waived gallons in 2026 and 2027."

The groups said exemptions were intended by Congress to provide "targeted relief in cases of genuine disproportionate economic hardship" because of the RFS -- "not to provide a pathway for a select group of refiners to secure regulatory arbitrage."

EPA has been consistent in saying the price of RINs, or renewable identification numbers, do not increase gas prices, the letter said.

"The EPA's Set 2 RVO presented a reasonable approach to restoring much of the renewable fuel volume lost to SREs granted in recent years," the groups said.

"But if EPA grants an amount of SREs well above the amount projected in the Set 2 RVO, it will decimate the demand signal that the Set 2 rule was designed to create. The consequences would be severe and immediate: biofuel markets would collapse as excess SREs reduce blending requirements. This would remove demand for corn, soybean oil, canola and other feedstocks, translating directly to lower farm prices and weaker rural economies."

The letter said consumers would lose "lower-cost fuel options" as "excess SREs would tighten the fuel market and undermine" the administration's stated goal of lowering energy costs.

"Investment in renewable fuel infrastructure would stall, signaling to every future investor that U.S. biofuel commitments cannot be trusted," the letter said.

Read more on DTN:

"Biofuels, Ag Fear RFS Exemption Surge," https://www.dtnpf.com/….

"4 State AGs Warn EPA: Granting Biofuel Exemptions to Record-Profit Refiners Violates RFS Law," https://www.dtnpf.com/….

Todd Neeley can be reached at todd.neeley@dtn.com

Follow him on social platform X @DTNeeley

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