Farm, biofuel groups urge Trump to curb expanded refinery exemptions

• The administration is considering roughly doubling SREs from 950 million to 1.8 billion credits, with a decision expected by end of August
• Groups warn excess exemptions would 'decimate demand' for biofuels, causing market collapse and reducing demand for corn and soybean oil
• Iowa Republican Senator Joni Ernst called the plan a 'handout to Big Oil,' arguing SREs would hurt farmers without lowering gas prices while padding refiners' profits

Summary

Key Development: A coalition of U.S. farm and biofuel groups is urging President Trump to reject a proposed expansion of small refinery exemptions (SREs) from the nation's biofuel blending requirements, warning it would severely damage rural America.

Critical Figures:

• The Trump administration is considering roughly doubling exemptions from approximately 950 million credits to as many as 1.8 billion credits
• Decision expected before end of August (2026)
• The expansion aims to address rising gasoline prices during the ongoing war with Iran ahead of November midterm elections

Stakeholders:

• Opposition: Renewable Fuels Association, Growth Energy, National Farmers Union, and Republican Senator Joni Ernst (Iowa)
• Beneficiaries: Small oil refineries seeking relief from blending requirements
• Affected commodities: Corn, soybean oil, ethanol, and biodiesel

Market Impact:

Renewable fuel credit (RIN) prices have already declined as traders anticipate weaker biofuel demand. Groups warn that excessive exemptions would "decimate the demand signal" from EPA's March 2026-2027 renewable volume obligations, potentially causing biofuel market collapse and reducing agricultural commodity demand.

Political Divide:

Senator Ernst characterized the proposal as "a handout to Big Oil falsely marketed as relief at the pump," arguing it would hurt farmers without lowering gas prices while benefiting refiners making record profits.

Background:

The Renewable Fuel Standard (RFS) requires refiners to blend renewable fuels or purchase RINs for compliance. SREs allow smaller refineries to avoid obligations by demonstrating economic hardship, effectively removing exempted volumes from the market.