The Iowa Renewable Fuel Association announced Tuesday that the Environmental Protection Agency’s recent exemption for 29 small oil refineries threatens the state’s booming biofuel sector. The agency granted full waivers to 18 refineries and partial waivers to 11, covering roughly 1.76 billion ethanol‑equivalent gallons of Renewable Identification Numbers (RINs) that would otherwise have been supplied by Iowa’s ethanol plants.
Local impact on corn and soy farmers
Monte Shaw, executive director of the Iowa Renewable Fuel Association, warned that the loss of demand could ripple through the state’s agricultural economy. “If you start pulling these industries back, the ripple effects are deep and painful,” Shaw said, noting that Iowa produced 4.6 billion gallons of ethanol in 2025—about 28 % of the nation’s total—and that the state relies on 42 ethanol refineries to process corn and soybeans.
National context and gasoline prices
The EPA’s move comes as gasoline prices remain above $4 per gallon nationwide, a record high for August according to the American Automobile Association. Industry group American Fuel and Petrochemical Manufacturers (AFPM) argues that the Renewable Fuel Standard imposes steep compliance costs, estimating up to $70 billion annually for the sector.
AFPM maintains that the waiver helps keep fuel prices lower for consumers, but Shaw counters that greater use of ethanol actually reduces pump prices, a benefit already evident in blended‑fuel pricing.
EPA plans to restore the credits
The agency says it intends to re‑impose the waived requirements for the 2026‑2027 compliance years. EPA officials expect about 990 million RINs to be exempted in 2025, yet the final waiver total reached 1.76 billion. If the agency follows through, other obligated refiners will be required to purchase the shortfall, preserving demand for renewable fuels.
The EPA has not yet issued a final rule; it aims to propose the reallocation by the end of October.
Political response in Iowa
Sen. Chuck Grassley (R‑Iowa) praised the EPA’s announcement as a “significant improvement” over earlier rumors and urged future administrations to fully reallocate the waived credits. Iowa Agriculture Secretary Mike Naig called the exemptions “unfortunate and unjustified,” urging the EPA to act quickly on the proposed reallocation.
Historical perspective
The controversy echoes a similar fight during the first Trump administration, when the EPA issued 85 retroactive exemptions covering 2016‑2018, cutting required renewable‑fuel volumes by about 4 billion gallons. Since then, at least 20 ethanol plants nationwide have closed, partially attributed to reduced ethanol use mandated by EPA policy.
Shaw said Iowa’s biofuel community will be watching closely. “Until a rulemaking is done, it’s not done,” he said, emphasizing the need for a timely and transparent reallocation process.
Original reporting: KCCI Des Moines — read the source article.
