US EPA proposes 100% reallocation for additional 2025 SRE volumes

The U.S. EPA announced Oct. 13 that, while in Peosta, Iowa, EPA Administrator Lee Zeldin announced revisions to the Renewable Fuel Standard Set 2 rule volumes to keep the historic volumes issued this spring intact and increase target markets for American farmers.

In response to the higher-than-projected 2025 small-refinery exemption (SRE) decisions and the needs of American farmers, the agency said it is proposing two options for revisions, both of which would reallocate 100 percent of the difference between projected and actual exempted volumes for 2025 SREs.  

“The Trump EPA understands the importance of providing a predictable and stable market for farmers, refiners and American consumers to both maintain economic competitiveness and keep energy prices low,” EPA stated.

The agency continued, stating that the proposal reflects the Trump administration’s commitment to ensuring America’s hardworking farmers continue to have a robust and growing market for their crops, while also unleashing American energy.  

“In each action taken, EPA works to deliver for all Americans,” Zeldin said. “From our farmers to our energy workers, each has an important role to play in growing our economy and ensuring America’s energy independence. As soon as we got into office, American farmers asked the Trump EPA not to give them handouts but create avenues for them to enter additional markets. As our farmers continue to harvest their crops, today’s proposal is working to maintain a strong and durable market for them to sell to.”

USDA Secretary Brooke Rollins added, “American biofuel producers have stepped up to the plate to provide record production, helping to fuel our nation and provide more market opportunities for our farmers. I’m thrilled to see Administrator Zeldin act on this growing momentum and provide a path forward to 100 percent reallocation by 2027. The American biofuel industry provides over $100 billion in economic activity and supports over 100,000 American jobs while helping to deliver on President Trump’s energy-dominance agenda. The Trump administration will continue to stand by and deliver results for our farmers.”

When EPA promulgated the Set 2 rule, the agency estimated the volume of SREs refineries would receive for their 2025 renewable fuel obligations.

The Aug. 31,2026, SRE decisions for those 2025 obligations exceeded EPA’s expectations, and an additional 770 million renewable identification number (RIN) credits worth of renewable fuels were exempted from RFS obligations.

EPA is now proposing to fully reallocate this volume to ensure farmers maintain and increase access to their markets.

The agency said it recognizes the importance of getting stakeholder input on the best approach to do so.

Therefore, EPA is seeking public comment on two proposed approaches: 

• Proposed approach No. 1: EPA would divide the additional 2025 SRE volume equally between the 2026 and 2027 compliance years. 

• Proposed approach No. 2: EPA would reallocate all the additional 2025 SRE volume to the 2027 compliance year.

EPA will take public comments on the proposal until Dec. 4.  

Additionally, the proposed revision to the 2026 standards may extend the existing 2026 compliance-reporting deadline of March 31, 2027.

If finalized, this proposal will ensure that all the benefits of the Set 2 rule will be realized for American farmers, EPA stated.  

“The Trump administration is carrying through on its promise to support Iowa family farmers and biofuel producers,” said Sen. Chuck Grassley, R-Iowa. “I worked closely with the White House, along with Sen. Ernst and Reps. Hinson, Miller-Meeks, Nunn and Feenstra, to secure full reallocation for all exempted biofuels, and I appreciate the Trump administration following through in a timely fashion. Today’s decision is a major boost for Iowa’s rural economy and the 31,000 Iowa jobs that biofuels directly employ.”

The American Soybean Association said maintaining the historic renewable fuel volumes established in the 2026-’27 RFS rule is a priority for the organization as soybean farmers work to protect domestic biofuel demand amid continued economic pressures.

“Soybean farmers are navigating a tough farm economy, and the administration’s strong domestic biofuel policies will continue to drive much-needed market demand in the U.S.,” said Dave Walton, an Iowa soybean farmer and ASA vice president. “We are encouraged by today’s proposal and urge EPA to get it across the finish line quickly.”

The Iowa Renewable Fuels Association said the EPA proposals mark an important first step toward ensuring the integrity of the RFS, and for providing greater certainty for farmers and biofuel producers.

“Biofuels producers and farmers will sleep easier tonight knowing that the draft reallocation rule is moving quickly towards finalization,” said Monte Shaw, IRFA’s executive director. “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. Fully reallocating the lost gallons will ensure the robust 2026-’27 RFS blending levels remain intact, thereby supporting Iowa’s biofuels plants and providing the market certainty our industry needs to keep growing. We appreciate EPA’s action and look forward to submitting comments during the process. We hope the rule can be finalized expeditiously.”

The National Oilseed Processors Association also welcomed the proposal, adding that it will submit comments during the public-comment period and work with EPA to finalize the rule as quickly as possible.

“NOPA appreciates the administration’s commitment to full reallocation,” said Devin Mogler, NOPA’s president and CEO. “Maintaining demand for domestically produced biofuels strengthens America’s fuel supply and reduces our reliance on foreign markets. This is ‘America First’ policy in action-supporting rural farmers, American biofuel producers and our domestic energy security.”

Given that EPA is proposing the rule ahead of schedule signals strong support for U.S. farmers and rural investments, according to Clean Fuels Alliance America.

“Clean Fuels appreciates Administrator Lee Zeldin’s effort to keep RFS volumes on track and to release this proposal earlier than originally promised,” said Kurt Kovarik, vice president of federal affairs for Clean Fuels. “As a result of this year’s historic RFS proposal, the U.S. biodiesel, renewable diesel and sustainable aviation fuel (SAF) industry has invested billions of dollars in rural America, created new job opportunities and massively increased domestic production of fuel to secure America’s energy dominance. The clean-fuels industry is delivering on the goals for the RFS and providing a critical supply of lower-cost diesel fuels right now. That contribution is important to control diesel prices and associated consumer costs. We urge EPA to finalize the proposal to add supplemental volumes to both 2026 and 2027 to ensure that the market signal from the robust RFS volumes is clear and immediate.”