The White House is reviewing a critical rule that could reshape the future of the Renewable Fuel Standard (RFS), pitting two politically powerful sectors-U.S. farmers and the oil refining industry-against one another. At the heart of the issue is whether and how to reallocate more than 140 biofuel blending waivers recently granted to small refineries. The decision could determine the fate of billions of gallons of ethanol and biodiesel demand over the coming years.

The Environmental Protection Agency (EPA) recently cleared a massive backlog of waiver applications dating back to 2016. The move ignited backlash from biofuel producers and farm groups, who argue that exempting these gallons without reallocation undermines the RFS mandate and risks collapsing corn and soybean markets. Ethanol production is a major source of demand for U.S. corn, while biodiesel is heavily tied to soybean oil.

The EPA has sent a supplemental rule proposal to the White House for review. That rule includes a preferred path to redistribute the exempted 2023 volumes, but also lays out alternative approaches - signaling that a full reallocation is not guaranteed. The administration is expected to fast-track the review process, with a draft proposal likely to be released ahead of a 30-day public comment period.

Farm-state lawmakers and agricultural organizations are urging the administration to uphold blending targets by forcing large refiners to make up for the lost gallons. "This is a critical moment and EPA's chance to uphold the president's promise to fight for U.S. farmers and expand domestic fuel production," said Devin Mogler, CEO of the National Oilseed Processors Association.

On the other side, refining groups and major oil companies are lobbying against reallocation. They argue it would unfairly shift the compliance burden to large refiners and inflate fuel production costs. "Re-allocation would add billions onto Americans' already massive RFS bill next year and the year after," said Chet Thompson, CEO of the American Fuel & Petrochemical Manufacturers, which represents companies like Phillips 66 and Marathon Petroleum.

The conflict over RFS exemptions has long been a thorny issue for presidents trying to balance the interests of farm states and energy-producing regions. Under the Trump administration, waiver approvals soared, angering Midwest producers who rely on steady biofuel demand. The Biden administration has signaled support for biofuels as part of its climate agenda, but the lack of clarity on reallocation has raised concerns about its commitment.

The EPA's decision could have a ripple effect across the farm economy. If blending volumes are not upheld, demand for corn-based ethanol and soy-based biodiesel could shrink significantly, adding downward pressure to already volatile commodity prices.

With 2025 planting decisions looming and input costs still elevated, farmers are closely watching for signs of market stability. The administration's choice will send a strong signal about its priorities: whether to preserve the integrity of the RFS and protect U.S. crop markets, or ease regulatory pressure on the domestic refining sector.

What comes next? If the White House supports full reallocation, large refiners would absorb the blending responsibility, preserving biofuel demand. If not, farm groups warn of loterm damage to rural economies and weakening of the U.S. biofuels sector's role in decarbonization.

The clock is ticking: industry stakeholders expect the rule to be released in the next two weeks, marking the beginning of a public battle over the future of the Renewable Fuel Standard.