U.S. Senators from states hosting refineries will seek to prevent the Trump Administration from reallocating biofuel blending mandates from exempted small refiners to larger ones, Reuters reported on Tuesday, citing a bill led and co-sponsored by several Republican lawmakers.
Senator Mike Lee of Utah is leading the so-called Protect Consumers from Reallocation Costs Act of 2025 bill, which the Senators plan to introduce on Tuesday amid a hotly contested issue between America’s Farm Belt and oil industry—both Republican darlings but with opposite interests in the U.S. biofuels policy.
The so-called Renewable Fuel Standard (RFS) is the U.S. policy under which oil refiners are required to blend growing amounts of renewable fuels into gasoline and diesel. It sets the number of gallons of renewable fuels that must be blended into the nation’s total fuel supply each year.
Under the RFS program, the Environmental Protection Agency (EPA) may grant a temporary exemption to a small refinery from the annual Renewable Volume Obligations (RVOs) if the refinery can demonstrate that compliance with the RVOs would cause the refinery to suffer disproportionate economic hardship.
Last month, EPA granted many exemptions to small refiners after processing a backlog of 175 petitions for exemptions since 2016. EPA also said it would submit a draft supplemental proposed rule to the Office of Management and Budget (OMB) on the proposed reallocations of the exempted volumes for 2023 and 2024.
This reallocation is now the issue with the larger refiners and the Senators from the refinery states who see the reallocation of the blending obligations as a burden for consumers.
“Punishing American energy producers who comply with the EPA’s made-up rules isn’t just unfair, it’s bad for everyday consumers. Americans will pay more at the pump and Utah’s refineries will suffer,” Senator Lee said in a statement carried by Reuters.
Other Republican Senators, including John Barrasso of Wyoming and Bill Cassidy of Louisiana, are also sponsors of the bill.
The issue is dividing Republicans as the oil companies and ethanol producers in their respective states are on two opposing sides.
After EPA’s waivers last month, Emily Skor, CEO of Growth Energy, the nation’s largest biofuel trade association, said “It is imperative that EPA reallocates each and every exempt gallon in a forthcoming rule to mitigate the potentially devastating impact on biofuel demand.”
However, the refiners’ association, the American Fuel & Petrochemical Manufacturers (AFPM), firmly opposes the reallocation of the biofuel volumes to the bigger refiners.
“Piling on more than a billion gallons in additional, reallocated mandates will do nothing other than increase imports, harm U.S. energy dominance and cost consumers,” AFPM President and CEO Chet Thompson said.
“This is akin to your neighbor getting a tax break and the IRS showing up at your doorstep with the bill. It is simply wrong.”
By Charles Kennedy for Oilprice.com
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