White House seeks 1.8B RIN refinery waivers to ease pump prices

The White House is pressing the EPA to approve up to 1.8 billion RINs in small refinery biofuel waivers, a move that would pare back record blending mandates and reignite a Farm Belt fight.

The White House has asked the EPA to expand small refinery biofuel waivers beyond the roughly 1 billion RINs the agency projected, as pump prices above $4 a gallon pressure Republicans ahead of November midterm elections, according to two administration officials.

"The refineries want to have their cake and eat it, too," the attorneys general of Iowa, South Dakota and Missouri wrote to EPA Administrator Lee Zeldin on Tuesday, urging him to reject broad waiver requests.

The EPA is reviewing 34 waiver requests and has projected approving enough to cover around 1 billion RINs of biofuel blending obligations this year. Industry representatives briefed by the administration expect approvals between 1.2 and 1.8 billion RINs in Small Refinery Exemptions — a meaningful cut into the record 26.81 billion RINs blending mandate the EPA set for 2026.

The decision, expected by the end of this month, will determine whether the administration can ease pump prices without alienating agricultural voters in the Farm Belt — a trade-off that defined the first Trump administration's biofuel battles.

The Policy Push

The request is being driven by senior White House adviser Stephen Miller, members of the administration's Energy Dominance Council and other policy advisers concerned about high energy costs, the sources said. The EPA told Reuters it is not being directed by the White House on which waiver requests should be approved or denied, and that no decisions have yet been made.

Under federal law, refiners must blend tens of billions of gallons of biofuels like corn-based ethanol into the fuel pool or buy renewable blending credits, called RINs, from those that do. Smaller plants can apply for waivers if they demonstrate the requirements create financial hardship.

The push revives one of the most contentious battles from the first Trump administration, when the EPA significantly expanded the exemption program to assuage the refining industry but angered the Farm Belt. The last time the agency expanded waivers at scale, RIN prices collapsed and biofuel producers sued the EPA, forcing a court-ordered review of the program.

Farm Belt Backlash

The administration has already released emergency oil stockpiles and waived certain anti-smog regulations for summer gasoline, but fuel prices remain stubbornly above $4 a gallon since the U.S. conflict with Iran interrupted Middle East oil exports through the Strait of Hormuz.

Senator Chuck Grassley of Iowa said on X on Monday: "I sure hope the Trump admin won't give small refinery exemptions at a near record level. Would only help petroleum refiners making record profits."

The prospect of large-scale exemptions has already hit RIN prices, which plunged to their lowest level in more than four months on Monday. The American Soybean Association said high exemptions could eliminate around 500 million gallons of biodiesel and renewable diesel demand and cost soybean farmers about $1 billion in lost revenue.

Refiners argue that high biofuel blending obligations raise gasoline prices by imposing higher operating costs. Biofuel advocates reject that argument, saying ethanol lowers fuel prices by adding supply volumes with a relatively cheap additive.

If the EPA approves waivers at the high end of expectations, biofuel producers face reduced demand for their credits and product, while small refiners gain relief on compliance costs. If the agency holds closer to its 1 billion RIN projection, Farm Belt interests avoid the worst-case revenue losses but pump prices remain elevated heading into the midterms.

This article is for informational purposes only and does not constitute investment advice.