The Trump administration is exploring measures to protect US farmers from the potential impact of an expanded biofuel waiver programme for oil refiners, according to reports.
The move comes amid concerns that granting additional exemptions could reduce demand for ethanol and biodiesel, key markets for American agricultural producers.
Under the Renewable Fuel Standard (RFS), refiners are generally required to blend renewable fuels into the nation's fuel supply or purchase compliance credits.
Small refinery exemptions allow qualifying operators to avoid some of these obligations if they can demonstrate economic hardship. However, biofuel producers and farm groups argue that widespread use of such waivers can undermine the programme by lowering overall demand for renewable fuels.
Reports suggest the administration is considering options to offset any negative effects on the agricultural sector, which has long been a major political constituency and a key beneficiary of biofuel policies.
Potential measures could include adjusting blending requirements, revising compliance calculations or implementing other mechanisms aimed at maintaining biofuel consumption levels.
The issue highlights the competing interests within the US energy market. Refiners have argued that compliance costs can place a heavy burden on smaller operators, while farmers and renewable fuel producers contend that exemptions weaken investment incentives and depress demand for crop-based fuels.
Any changes to the waiver system are likely to be closely watched by agricultural groups, biofuel producers and the refining industry.
The administration's challenge will be balancing support for domestic energy producers with efforts to safeguard farm incomes and sustain growth in the renewable fuels sector.
Trump seeks ways to shield farmers from expansion of refinery biofuel waivers
