American Soybean Association officials are generally pleased with EPA’s latest action on Renewable Fuel Standard regulations. If nothing else, the agency’s latest rules maintained the status quo. The alternative could have been much worse, according to ASA.
Iowa soybean farmer Dave Walton serves as ASA vice president. During the Farm Progress Show, he took a few minutes to explain how his organization fought back against a new law that could have been devastating to the soybean industry.
Small rule with big impacts
In mid-August, EPA announced it planned to expand the number of small refinery exemptions (SRE) granted. This would have essentially doubled the number of unobligated Renewable Identification Numbers (RIN) from around 990 million to 1.76 billion for the 2025 Renewable Fuel Standard compliance year.
“That would have caused huge economic harm to farmers. It would have had a huge economic impact on just about every soybean farmer,” Walton said.
According to an ASA analysis, that many unobligated RINs would have eliminated around 500 million gallons of biomass-based diesel demand. It would have cost soybean farmers around $1 billion in lost revenue.
On Aug. 31, EPA announced it intended to reallocate those additional RINs to larger refiners in the 2026-27 compliance year. This, Walton said, essentially negated the potential impact of the SRE expansion.
“We’re kind of back to where we started from, but it could have been a lot worse for U.S. soybean farmers,” Walton added.
What does all that mean in English?
The Renewable Fuel Standard is a federal program requiring transportation fuel sold in the U.S. to contain a minimum volume of renewable fuels. EPA sets annual renewable volume obligations that establish annual volume targets for various biofuel categories.
Compliance for those volume targets are tracked via RINs. Those are serial numbers assigned to each gallon of renewable fuel produced. Refiners can meet those targets by either blending fuels or buying RINs from other traders.
Small refiners that prove they will suffer “disproportionate economic hardship” by complying with the Renewable Fuel Standard may apply for an SRE. This means they are not obligated to blend or purchase RINs.
How does that harm soybean farmers?
Soybean farmers can get better return for their crops when biofuel demand is high. An oversupply of RINs invariably weakens soybean demand.
When EPA announced its original SRE plan, ASA officials sprung into action. They worked with the agency, spoke with White House officials and lobbied various lawmakers. Within in weeks, EPA changed course.
“In the end, it was a big win for farmers that [we] got those RINs back into the market for 2026 and ‘27,” Walton said.