Farm, fuel groups celebrate EPA proposals to reallocate small refinery exemptions 

Farmers and biofuel producers in Iowa are celebrating a proposal from U.S. Environmental Protection Agency Administrator Lee Zeldin to reallocate renewable fuel requirements from which small refineries received an exemption. 

The move ensures that renewable fuel blending standards set by the EPA are maintained after small refineries — that prove they would receive “disproportionate economic hardship,” by complying with the renewable fuel standards — receive exemptions from EPA. 

At the end of August, EPA fully or partially exempted nearly 30 small refineries from the 2025 renewable fuel standard obligations, but also said it planned to reallocate 100% of the fuel exempted from the small refineries. 

Fuel producers satisfy EPA’s annual renewable fuel standards by either blending renewable fuels, like ethanol or biodiesel, into their products or by purchasing credits to offset the gas they produce. 

Zeldin, as part of his tour through Iowa, proposed two possible avenues to reallocate the renewable identification numbers, or RINs, while in Peosta Tuesday. 

The first option would spread the more than 770 million RINs worth of exempted renewable fuel equally across 2026 and 2027 compliance years, while the second option would add the exempted RINs to the 2027 compliance year. 

Zeldin’s visit, and the announcement, follows several stops in Iowa from Trump administration officials ahead of the November midterm election where Iowa has a slate of highly competitive races. The EPA news release on the proposal included statements from Iowa’s all Republican congressional delegation, the majority of whom are on the ballot.

Biofuel producers, and farmers growing biofuel feedstocks, have opposed the small refinery exemptions in the past. Iowa Attorney General Brenna Bird has urged feds to investigate the refineries to ensure they aren’t manipulating the program. 

Senate Majority Leader John Thune, R-South Dakota, has said passing a law to allow year-round access to E-15 fuel would likely require compromises on small refinery exemptions to get enough votes to move forward. 

The Iowa Corn Growers Association said in a statement Tuesday that growers met with Zeldin while he was in Iowa to again ask for the exempted gallons to be reallocated. Iowa Corn Growers Association President Steve Kuiper said the move from EPA sends “a strong market signal that energy independence matters, while supporting farmers and biofuels producers.”

Lee Brooke, the Iowa Soybean Association president, also thanked EPA for the move toward reallocation, which he said comes as farmers are “navigating a challenging farm economy.” 

“This proposal offers the potential for greater certainty and much-needed domestic demand for soybeans if finalized later this year,” Brooke said in a statement. “We’re encouraged by this step forward and urge the EPA to finalize the rule swiftly to help provide the market certainty farmers need.”

Iowa Renewable Fuels Association President Monte Shaw also called for EPA to finalize the rule. 

“Today is a great first step, and we thank Administrator Zeldin and the EPA for sending a strong signal to farmers and biofuels producers that these gallons matter,” Shaw said in a statement. “Fully reallocating the lost gallons will ensure the robust 2026-2027 RFS blending levels remain intact, thereby supporting Iowa’s biofuels plants and providing the market certainty our industry needs to keep growing.” 

Iowa’s Secretary of Agriculture Mike Naig said a strong renewable fuel standard and reallocating the small refinery exemptions would be “an important step toward delivering the certainty our farmers and biofuel producers need to invest and grow.”

According to a news release from EPA, the agency is accepting public comments on the proposed reallocation rules until Dec. 4.