White House poised for pivotal decision on biofuel rules

The White House is preparing to make a high-stakes decision that could reshape America’s energy and agricultural sectors – and test the balance between climate goals and economic interests.
At the heart of the debate is whether to force major oil refiners to offset billions of gallons of recently waived biofuel blending obligations, a move that could either bolster struggling farmers or saddle refiners with soaring costs.
The ruling, expected in the coming weeks, will have sweeping consequences for ethanol and biodiesel markets, farm incomes, and fuel prices – while deepening a political battle between powerful agricultural and oil-producing states.
Biofuel mandates were originally introduced to cut greenhouse gas emissions and reduce reliance on fossil fuels. However, under the Trump administration, this climate objective was largely sidelined in favour of boosting oil and gas production.
Last month, the Environmental Protection Agency (EPA) resolved a backlog of more than 170 applications from small refineries – some dating back to 2016 – seeking exemptions from the obligation to blend biofuels under the Renewable Fuel Standard (RFS).
Over 140 of these waivers were granted, either fully or partially, sparking outrage among farmers and biofuel producers.
This move has now opened the door to a new supplementary rule that would determine whether – and how – larger refiners must compensate for the lost volumes.
Biofuel producers and farming groups argue that such a step is essential to prevent a collapse in crop markets, particularly at a time when farmers are already facing volatile commodity prices and weaker global demand.
Refiners, however, warn that reallocation would shift the compliance burden onto larger plants, significantly increasing costs and potentially driving up fuel prices for consumers. They also argue that the administration has already proposed a substantial increase in next year’s blending quotas, making additional measures unnecessary.
“This is a critical moment and the EPA’s chance to uphold the president’s promise to fight for US farmers and expand domestic fuel production,” said Devin Mogler, chief executive of the National Oilseed Processors Association.
Chet Thompson, chief executive of the American Fuel & Petrochemical Manufacturers – which represents refiners including Marathon Petroleum and Phillips 66 – countered that reallocation would be deeply damaging:
“The administration has already proposed a massive increase in biofuel quotas for next year, and reallocation would add billions to Americans’ already significant RFS bill next year and the year after.”