Coalition sends letter to President Trump warning of consequences from increased SREs

Clean Fuels Alliance America joined other members of the Fuels America Coalition in a letter to President Donald Trump Aug. 27 warning against the administration’s plan to increase Renewable Fuel Standard small-refinery exemptions (SREs).

The White House launched the 2026-’27 RFS rule during National Ag Week in March.

The rule promised to drive investment in rural America, provide a domestic market for U.S. farmers to reduce reliance on foreign markets and promote the role of farmers in America’s energy dominance.

The U.S. biodiesel, renewable diesel and sustainable aviation fuel (SAF) industries responded exactly as asked by the administration.

Companies that had been running at half capacity in 2025 due to policy uncertainty are now running near full capacity.

Domestic production in June and July reached record levels and maintained a pace sufficient to meet U.S. EPA’s volumes.

The industry’s use of domestic feedstocks is reaching record levels too.

Additional investments in production capacity and market use have been announced across the nation.

As the attached letter states, “these gains are at risk from pending SREs.”

The letter to President Trump, in its entirety, is below.

“On behalf of America’s farmers, biofuel producers, oilseed processors, feedstock suppliers and rural communities, we write to thank you for your administration’s commitment to American energy dominance, domestic manufacturing, reducing consumer prices at the pump, and strengthening rural America. We also urge you to stand strong against misguided efforts to increase the use of small-refinery exemptions (SREs). Reducing blending volumes in the RFS program through the use of SREs will destroy the biofuel demand that is now working to restore the rural economy and reduce fuel costs for drivers.

“History is unambiguous: the last time EPA granted SREs at the scale being contemplated, the biofuel industry lost $6.4 billion, renewable fuel credits collapsed by up to 78 percent, and gas prices rose 12 percent—RIN prices clearly don’t drive gas prices. The only winners were refiners in a sector that today is reporting record profitability, even as American farmers face down another year of negative incomes.

“Your administration’s actions to date to restore certainty to the RFS have provided a strong signal that the United States is committed to expanding domestic fuel production, supporting farm income, and reducing reliance on foreign energy sources. The Set 2 renewable volume obligation (RVO) for 2026 and 2027, finalized in March of 2026, represented a decisive, market-defining commitment to American biofuels, domestic agriculture and rural economic growth.

“Since finalization of the Set 2 RVO, more than a dozen companies have increased production or announced investments in crush capacity, renewable diesel and SAF infrastructure, with executives and company statements directly citing RFS policy as the driver. The U.S. soybean-processing industry has invested over $7 billion to expand crushing capacity by over 25 percent—enough to process two-thirds of the soybeans grown in the U.S., reducing reliance on the Chinese market. EPA estimates that the 2026 RVO will create $31 billion in value for American corn and soybean oil and USDA estimates a $3 billion to $4 billion increase in net farm income directly attributable to the Set 2 RVO finalization, supporting more than 100,000 new agricultural and manufacturing jobs.

“Today, these gains are at risk from pending SREs.

“As your administration considers pending SRE decisions for the 2025 compliance year, we urge you to keep any SREs granted consistent with the projected level of exempted volumes that were used by EPA to establish the current program structure in the final Set 2 RVO, with the reallocation of any waived gallons in 2026 and 2027.

“SREs were intended by Congress to provide targeted relief in cases of genuine disproportionate economic hardship as a result of the RFS—not to provide a pathway for a select group of refiners to secure regulatory arbitrage. EPA has consistently determined over the last decades that RIN prices do not increase gas prices, and evidence from specific periods of high RIN prices shows no corresponding increase in gas prices attributable to RINs.

“The EPA’s Set 2 RVO presented a reasonable approach to restoring much of the renewable fuel volume lost to SREs granted in recent years. But if EPA grants an amount of SREs well above the amount projected in the Set 2 RVO, it will decimate the demand signal that the Set 2 rule was designed to create.

“The consequences would be severe and immediate: biofuel markets would collapse as excess SREs reduce blending requirements. This would remove demand for corn, soybean oil, canola and other feedstocks, translating directly to lower farm prices and weaker rural economies. Consumers would lose lower-cost fuel options as excess SREs would tighten the fuel market and undermine the administration’s stated goal of lowering energy costs. Investment in renewable fuel infrastructure would stall, signaling to every future investor that U.S. biofuel commitments cannot be trusted. Reallocation of waived gallons above the levels published in the Set 2 RVO at some uncertain time in the future beyond 2027 won’t mitigate what will be irreparable harm today.

“We respectfully urge your administration to implement the final rule consistent with EPA’s own assumptions and reject proposals to increase SRE waivers beyond the levels in the final Set 2 RVO, protect the farmers and rural communities who depend on strong RFS volumes to drive commodity markets, take action to lower prices at the pump and preserve domestic energy security with American biofuel production.”