SABR warns EPA against changing biodiesel exemption rules

The Sustainable Advanced Biofuel Refiners Coalition is pressing the Trump administration to leave small refinery exemption rules unchanged, arguing that a midstream EPA shift could cut U.S. biodiesel output, pressure farm incomes and push diesel prices higher. The warning comes as global fuel shortages, trade disruptions and uncertainty around the Renewable Fuel Standard continue to strain the market.

Why it matters: - A change to EPA’s small refinery exemption rules could reduce domestic biodiesel production at a time when U.S. diesel supply is already tight. - SABR says expanded exemptions would hurt soybean farmers, biodiesel producers, glycerin refiners, fuel distributors and retailers. - The coalition argues that less biodiesel in the fuel mix would make diesel prices higher than they would be otherwise.

What happened: - The Sustainable Advanced Biofuel Refiners Coalition urged the Trump administration not to change the formula EPA uses for small refinery exemptions under the Renewable Fuel Standard. - SABR said EPA may be considering a midstream rule change that would expand exemptions for petroleum companies. - The coalition said the move would pull back on a market that is already working.

The details: - SABR represents stakeholders across the biodiesel value chain, including soybean farmers and processors, biodiesel producers, glycerin refiners, and fuel distributors and retailers. - The coalition said those industries support jobs for millions of American households and generate billions of dollars in domestic economic activity. - SABR said 2025 was devastating for biodiesel because of federal energy and tax policy uncertainty. - The coalition said that uncertainty continued into the first quarter of 2026. - The administration then issued robust volumes under the Renewable Fuel Standard, which SABR said gave the industry hope for a recovery. - Biodiesel producers increased output to help fill the domestic diesel supply during global fuel shortages and price increases. - SABR said the added biodiesel supply is helping keep U.S. diesel prices lower than they would be otherwise. - The coalition said EPA is now considering expanding eligibility for small refinery exemptions. - SABR said small refinery exemptions were meant to be a short-term transitional tool in the early years of the Renewable Fuel Standard. - The coalition described the exemptions as an annual reward to oil companies and a destabilizing penalty to biofuel and agricultural markets. - SABR said the proposed change would expand exemptions for oil companies that are earning record profits from higher refinery margins and are not facing economic hardship. - The coalition said farmers have been hurt by shifting trade and biofuel policies. - SABR said farm bankruptcies rose 46% in 2025. - The coalition said the conflict in Iran has added to farmers’ costs in 2026 by driving up diesel prices and disrupting fertilizer and other inputs. - SABR CEO Joe Jobe said the 2026 biodiesel market has been like a football game where the rules were not set until the start of the second quarter and may now be changed in the third quarter. - Jobe said EPA already issued a final rule with robust biofuel volumes and other changes that are working.

Between the lines: - SABR is framing the issue as a fight between stable renewable fuel policy and oil industry relief. - The coalition is trying to tie biodiesel policy directly to farm income, diesel prices and supply security. - EPA’s next move could signal whether the administration prioritizes refinery exemptions or a stronger renewable fuel mandate.

What's next: - SABR is urging EPA to keep the current rules in place and allow the existing Renewable Fuel Standard volumes to work. - Any EPA decision to broaden exemptions would likely draw pushback from biofuel and farm interests. - The coalition said continued policy stability is needed to support fuel supply and the broader American economy.

The bottom line: - SABR says changing small refinery exemption rules now would weaken biodiesel recovery just as the industry is helping shore up U.S. diesel supply.