Trump Admin Weighs Big Biofuel Waivers, Iowa AG Warns Against Refinery Giveaways

The White House is pressing federal regulators to expand small-refinery biofuel waivers in a bid to lower gasoline prices, a move that has Iowa's top law enforcement official and agricultural leaders pushing back hard.

Two administration officials told Reuters that senior Trump advisers, including Stephen Miller and members of the Energy Dominance Council, have asked the Environmental Protection Agency (EPA) to grant more exemptions than originally projected. The goal is to ease pump prices, which remain above $4 a gallon despite other White House efforts like releasing emergency oil stockpiles.

But the push is reigniting a bitter Farm Belt fight over ethanol mandates, with Iowa's attorney general joining counterparts from South Dakota and Missouri in demanding the EPA reject broad waivers that could cost soybean farmers an estimated $1 billion in lost revenue.

What are small-refinery biofuel waivers?

Under federal law, refiners must blend tens of billions of gallons of biofuels like corn-based ethanol into the nation's fuel supply each year. Smaller plants can apply for waivers if they prove the requirements create disproportionate economic hardship.

The EPA is currently reviewing 34 waiver requests. It had projected granting enough to cover around 1 billion RINs, the renewable blending credits used to track compliance. But administration officials are pushing for a higher volume, with industry sources expecting approvals between 1.2 and 1.8 billion RINs.

That would cut into the record 26.81 billion RINs the EPA set as this year's overall blending mandate.

Iowa leaders push back against refinery exemptions

On Tuesday, Iowa Attorney General Brenna Bird joined her South Dakota and Missouri counterparts in a letter to EPA Administrator Lee Zeldin urging him to reject broad waiver requests. The letter argues that recent glowing refining industry earnings reports undermine any claim of economic hardship.

“The refineries want to have their cake and eat it, too,” the letter said.

Sen. Chuck Grassley, R-Iowa, also weighed in on X, writing: “I sure hope the Trump admin won't give small refinery exemptions at a near record level. Would only help petroleum refiners making record profits.”

The American Soybean Association warns that high exemptions could eliminate around 500 million gallons of biodiesel and renewable diesel demand, costing soybean farmers about $1 billion in lost revenue.

Why the White House is pushing for more waivers

The renewed push reflects growing concern over high gasoline prices following the U.S. conflict with Iran, which interrupted Middle East oil exports through the Strait of Hormuz. Pump prices are seen as a potential hurdle for Republicans heading into the November midterm elections.

Refiners argue that high biofuel blending obligations raise gasoline prices by imposing higher operating costs. Biofuel advocates counter that ethanol lowers fuel prices by adding a relatively cheap additive to the fuel supply.

The EPA told Reuters it is not being directed by the White House on which waiver requests should be approved or denied, and that no decisions have been made yet. A decision is expected by the end of this month.

What happens next for Iowa farmers?

The prospect of large-scale exemptions has already hit RIN prices, which plunged to their lowest level in more than four months on Monday. That volatility is a concern for Iowa's agricultural economy, where ethanol and biodiesel production are major drivers.

The issue revives one of the most contentious battles from the first Trump administration, when the EPA significantly expanded the exemption program and angered the Farm Belt in the process.

For Iowa farmers and biofuel producers, the stakes are clear: expanded waivers could mean lower demand for their crops and tighter margins. The EPA's decision, expected within days, will signal whether the administration prioritizes lower pump prices or agricultural interests in the heartland.

Frequently asked questions

How do biofuel waivers affect gas prices?

Refiners argue that biofuel blending obligations raise their operating costs, which are passed on to consumers. Biofuel advocates say ethanol actually lowers fuel prices by increasing supply with a cheaper additive.

Who benefits from small-refinery exemptions?

Small oil refineries that can demonstrate disproportionate economic hardship benefit directly. But agricultural groups say the exemptions hurt farmers by reducing demand for corn and soybeans used in biofuel production.

When will the EPA announce its decision?

The EPA has said a decision on the 34 pending waiver requests is expected by the end of this month.