EPA Proposes Renewable Fuel Standards Supplemental Rule, Addresses Small Refinery Exemptions
WASHINGTON – Today, U.S. Environmental Protection Agency (EPA) is issuing a supplemental notice of proposed rulemaking (SNPRM) that revises the proposed Renewable Fuel Standard (RFS) “Set 2” renewable volume requirements (RVOs) for 2026 and 2027 to account for the small refinery exemption (SRE) decisions issued on August 22, 2025. This proposal is an important step in the EPA’s tireless work to repair the damage done after four years of the Biden-Harris Administration neglecting key components of the RFS program, including threats to transform the RFS program into a subsidy for electric vehicle charging stations as part of a larger strategy to electrify the transportation sector. The Trump Administration reaffirms its renewed commitment to honor the program’s purpose to support biofuels as an essential part of a thriving liquid fuels market.
The SNPRM seeks to balance the goals of the RFS program in supporting the production and use of renewable fuels while taking into account economic impacts, following the law, and ensuring opportunity for public comment. Under President Trump, EPA continues to restore the RFS program to align with Congressional directives and give American businesses and rural economies the certainty they need to thrive, all while using homegrown American biofuels.
Specifically, the SNPRM considers how SREs for compliance years 2023 – 2025 will be accounted for when establishing the RVOs in the “Set 2” final rule. EPA is co-proposing two approaches:
1. Additional volumes accounting for 100 percent of the 2023 – 2025 exempted RVOs.
2. Additional volumes accounting for 50 percent of the 2023 – 2025 exempted RVOs.
EPA is also taking comments on SRE reallocation volumes equal to other amounts.
The SRE decisions issued on August 22, 2025, exempted significant volumes of gasoline and diesel for the 2023 and 2024 compliance years, resulting in an increased number of RINs available for obligated parties to use for compliance. EPA also expects additional exemptions to be granted for the 2025 compliance year. The ability for obligated parties to use these RINs to comply with the 2026 and 2027 RVOs is expected to impact demand for renewable fuel if not carefully considered.
Upon publication in the Federal Register, EPA will hold a public hearing followed by a 30-day public comment period. More information about the comment period and public hearing can be found at the Proposed Renewable Fuel Standards for 2026 and 2027: Supplemental Notice webpage. EPA recognizes the importance of issuing one final Set 2 rule that establishes the RVOs for 2026 and 2027 and addresses the reallocation of SREs from 2023 – 2025 in these years.
Background
In June, EPA announced a major step forward to strengthen American energy security and support American farmers by proposing RFS volume requirements for 2026 and 2027. The comment period for the proposed rule closed on August 8, 2025. EPA is currently reviewing the comments submitted on the “Set 2” proposed rule and working on a final regulation.