The EPA proposed reallocating the biofuel gallons affected by the exemptions granted to 29 small refineries for 2025, which impacted 1.76 billion RIN credits versus the 990 million estimated. Agricultural and biofuel groups welcomed the measure and called for swift finalization.
The U.S. Environmental Protection Agency (EPA) announced on Tuesday, October 13, 2026, a proposed rule to reallocate the biofuel gallons affected by the exemptions granted to small refineries under the Renewable Fuel Standard (RFS). The measure seeks to ensure that the biofuel volumes required by the rule are not lost, but are fulfilled by non-exempt refineries.
In August, the agency granted small refinery exemptions (SREs) to 29 refineries for the 2025 RFS requirements, impacting 1.76 billion compliance credits, known as Renewable Identification Numbers (RINs). Each RIN equals one gallon of corn-starch ethanol. The agency had initially estimated that the exemptions would affect only 990 million RINs for 2025, so Tuesday's proposal seeks to reallocate the difference between what was estimated and what was actually exempted.
The EPA noted that the proposal lays out two approaches and opened a public comment period running through December 4.
Numerous agricultural and biofuel organizations welcomed the measure. American Coalition for Ethanol (ACE) CEO Brian Jennings said the association appreciates that the EPA is following through on its commitment to address the additional RFS volumes waived through the 2025 SREs and is proposing to reallocate the full difference between projected and actual exempted volumes. "Every gallon of renewable fuel displaced by an SRE represents lost demand for American ethanol, lost value for farmers, and a missed opportunity to lower fuel costs for consumers," he said.
Renewable Fuels Association (RFA) President and CEO Geoff Cooper thanked Administrator Lee Zeldin and the White House for honoring their commitment to fully restore the renewable fuel volumes lost to the recent exemptions. Although the RFA considers most of the exemptions unjustified, Cooper said the reallocation plan, "if finalized as proposed, will help offset the demand loss for ethanol producers and farmers," and called for swift finalization to provide certainty ahead of 2027.
Growth Energy CEO Emily Skor said that with the proposal the EPA would deliver on the full potential of the historic renewable volume obligations (RVO) and its promise to fully make whole American farmers and biofuel producers, and stressed that reallocating the lost gallons would strengthen the rural economy. Along the same lines, Iowa Renewable Fuels Association (IRFA) Executive Director Monte Shaw said: "Biofuel producers and farmers will sleep easier tonight knowing that the draft reallocation rule is moving quickly toward finalization."
Organizations representing soybeans, canola and clean fuels also backed the proposal and urged the EPA to finalize it quickly. The American Soybean Association (ASA) applauded Administrator Zeldin and the Trump administration for keeping their commitment to farmers and proposing to restore 100% of the biofuel volume affected by the 2025 exemptions. Clean Fuels Alliance America urged the EPA to finalize the proposal in order to add supplemental volumes for 2026 and 2027, so that the market signal from robust RFS volumes is clear and immediate.
Iowa Secretary of Agriculture Mike Naig thanked Administrator Zeldin for traveling to Iowa to make the announcement and stressed that a strong RFS and full reallocation of the exemptions represent an important step toward giving farmers and producers the certainty they need to invest and grow. Several groups, including ACE, also called for Congress to pass legislation before the end of the year enabling year-round E15 sales, and asked the EPA to set strong volumes in its upcoming "Set 3" rule.
