The Environmental Protection Agency released decisions on 34 small refinery exemption petitions for the 2025 compliance year under the Renewable Fuel Standard program on Sept. 1, in one of the most closely watched energy policy actions of the year.
Small refinery exemptions determine whether qualifying refineries must comply with RFS biofuel blending mandates or receive a hardship waiver, according to the EPA. The number of exemptions granted versus denied was not specified in the agency’s announcement.
The decisions have immediate economic consequences for both the ethanol industry and the petroleum refining sector. Each exemption granted reduces the volume of ethanol that must be blended into the U.S. fuel supply, directly affecting demand for corn-based ethanol and the prices corn farmers receive.
The ethanol industry, concentrated in Midwestern corn-producing states, has consistently opposed broad use of small refinery exemptions, arguing they undermine the statutory purpose of the Renewable Fuel Standard. The Renewable Fuels Association has lobbied aggressively for EPA to deny exemption petitions.
Small refineries and their trade associations argue that RFS compliance costs are disproportionately burdensome for smaller operations that lack the infrastructure and economies of scale of major integrated oil companies.
For American corn farmers, small refinery exemption decisions directly affect the market for their crop. Approximately 40 percent of the U.S. corn crop is used for ethanol production, making RFS compliance a foundational driver of corn demand and prices.
For consumers at the fuel pump, the decisions influence the availability and pricing of E10 and E15 blended fuels that make up the majority of gasoline sold in the United States.
The RFS program, established by Congress in 2005 and expanded in 2007, requires increasing volumes of renewable fuel to be blended into the nation’s transportation fuel supply.