Agri-Pulse’s Kim Chipman reported that “the Environmental Protection Agency on Monday announced 29 full and partial small refinery exemptions (SREs) under the Renewable Fuel Standard (RFS) program for 2025. That amounts to 1.76 billion RINs, or biofuel credits used to track RFS compliance, far surpassing the roughly 990 million RINs initially indicated by EPA.”
“Amid concerns from the ag community about the impact on biofuel demand, the agency said it will reallocate 100% of the difference between projected and actual exempted volumes for 2025 SREs into the biofuel-blending requirements, known as Renewable Volume Obligations (RVOs), for this year and next,” Chipman reported. “EPA says it will act before the end of next month.”
“Without that reallocation, the American Soybean Association warned that biomass-based diesel demand would decline by 500 million gallons and soybean farmers would see almost a $1 billion loss in revenue,” Chipman reported. “… ‘Soybean farmers greatly appreciate President Trump, Senator Grassley along with other biofuel champions in Congress, and USDA officials for sounding the alarm and working around the clock to ensure that soybean farmers and producers of homegrown biofuels are not negatively impacted by today’s SRE announcement,’ Dave Walton, ASA vice president and Iowa soybean farmer, said in a statement.”
Reuters’ Jarrett Renshaw and Siddharth Cavale reported that “the decision caps a week of intense lobbying by the Farm Belt and Big Oil over pending small-refinery exemption requests, pitting farmers who fear lost demand for biofuel crops against refiners seeking relief from costly blending mandates.”
“The EPA said it will propose by the end of October requiring larger refiners to produce biofuels equal to the difference between the actual and estimated volumes exempted in the 2026 and 2027 obligation years,” Renshaw and Cavale reported. “This would ensure the issue of how the overall production quota is met gets addressed before the November midterm elections. But the plan would remain subject to public scrutiny and a regulatory process that does not guarantee it will take effect.”
Soybean Futures Hit 3-Year High After Exemption Announcement
Bloomberg’s Ben Westcott reported that “US soybean futures hit their highest level in almost three years after the Trump administration’s renewable fuel exemption announcement came in more bullish than expected for biofuel demand.”
“In a relief for farmers, who had feared a drop in demand for their crops ahead of the exemption announcement, the EPA surprised the market by reallocating the difference between the projected and actual exempted volumes for 2025 to the 2026 and 2027 mandates, shifting the lost biofuel demand forward,” Westcott reported. “‘It’s a much more positive outcome; the market was bracing itself for this massive amount of small refinery exemptions,’ said Susan Stroud, analyst and founder at No Bull Agriculture, adding that the net effect would effectively be minimal. ‘What they gave back for 2025 is actually being shoved back to 2026 or 2027, so the net effect is not really that big,’ she added.”
“Soybean futures in Chicago jumped by as much as 1.2% on Tuesday following the announcement, hitting the highest since December 2023, before paring some of the gains,” Westcott reported. “Soybean oil rose by more than 2.4% before dropping slightly.”
Ag Reaction Mixed
Progressive Farmer’s Todd Neeley reported that “Clean Fuels Alliance America said in a statement it was ‘disappointed’ with the latest round of SREs.”
“Kurt Kovarik, Clean Fuels’ vice president of federal affairs, said his group would work with the administration to make sure the gallons waived would be reallocated,” Neeley reported. “‘America’s biodiesel, renewable diesel and SAF (sustainable aviation fuel) producers have been working overtime to meet the historic RFS volumes announced just last March,’ he said.”
“National Corn Growers Association President Jed Bower said corn growers were ‘disheartened’ by the number of SREs granted,” Neeley reported. “‘We are thankful that the Trump administration is taking action to offset this development by pledging to reallocate these RINs,’ Bower said in a statement. ‘Reallocation is essential for protecting farmers, biofuel producers and consumers alike.'”
“Devin Mogler, president and CEO of the National Oilseed Processors Association, said the exemptions had created uncertainty in the market,” Neeley reported. “‘President Trump’s strong RFS put American agriculture on a path toward greater certainty, investment and growth, and we appreciate the president and Congress stepping in to protect that progress,’ Mogler said. ‘We remain disappointed by the sheer volume of these refinery exemptions and the uncertainty they have injected back into the market. But restoring waived gallons to the established RFS volumes is critical to sustaining domestic growth, creating stronger markets for American farmers and reducing our reliance on China.'”
