Trump Team Weighs Big Biofuel Waiver Expansion, Drawing Farm Belt Ire
The Trump administration is considering nearly doubling small refinery biofuel waivers to lower gasoline prices, drawing sharp criticism from farm and biofuel groups.
President Donald Trump and senior administration officials discussed a plan on Wednesday to cushion the Farm Belt from a potentially large expansion of biofuel waivers, according to two people familiar with the meeting. The move is being considered as a way to ease gasoline prices amid the conflict with Iran, reviving one of the most contentious energy policy battles of Trump's first term.
The White House is backing a proposal to significantly increase the small refinery exemption program, sources said. The administration hopes the move will tame surging fuel costs and help Republicans retain control of Congress in the November midterm elections, while avoiding a backlash from rural voters.
Traders have already reacted to the prospect of a larger waiver program, sending prices for renewable fuel credits, known as RINs, sharply lower on expectations of weaker biofuel demand.
A coalition of farm and biofuel groups, including the Renewable Fuels Association, Growth Energy, and the National Farmers Union, urged Trump on Thursday to reject any expansion. In a letter, they warned that a surge in exemptions would hurt rural America by undercutting demand for crops and renewable fuels. They argued that exemptions for the 2025 compliance year should align with the volumes the Environmental Protection Agency assumed when it set biofuel blending requirements for 2026 and 2027.
The administration is considering roughly doubling the size of the exemptions, from 990 million credits to as many as 1.8 billion. A decision is expected before the end of August. The groups warned that granting exemptions well above EPA-anticipated levels would "decimate the demand signal" created by the agency's March rule, with consequences that would be "severe and immediate," potentially collapsing biofuel markets and reducing demand for corn and soybean oil.
A White House official said the administration "will make a decision that is best for consumers, farmers, and energy supply chains." The EPA did not immediately respond to requests for comment.
The Renewable Fuel Standard requires refiners and fuel importers to blend specified amounts of renewable fuel into the U.S. fuel supply or buy RINs to demonstrate compliance. Small refinery exemptions allow some plants to avoid these obligations if they can demonstrate economic hardship. When exemptions are granted, the exempted fuel volumes are effectively removed from the market unless the obligation is later reallocated.
Trump and agency heads discussed a plan that would restore the lost gallons from exemptions in future biofuel quotas, though it was unclear exactly how they planned to do so.
Senator Joni Ernst, a Republican from Iowa, criticized the potential expansion, calling it "a handout to Big Oil falsely marketed as relief at the pump." She added, "You don't lower gas prices by taking American-made biofuel off the market, and these exemptions will crush demand for corn and soybeans while padding the pockets of refiners already making record profits. Farmers lose, consumers get nothing, and oil companies rake in the cash."