The U.S. Environmental Protection Agency has signed a proposed rule, “Renewable Fuel Standard (RFS) Program: Reallocation of Additional 2025 Small Refinery Exemptions” (Docket EPA-HQ-OAR-2024-0505; RIN 2060-AX09; FR Doc. 2026-21155). Administrator Lee Zeldin signed it on 13 October 2026. It went on public inspection on 15 October and was published in the Federal Register on 16 October 2026. Comments are due 4 December 2026. EPA will hold a virtual public hearing on 4 November; registration closes 28 October.
The RFS requires refiners and importers of gasoline and diesel to blend renewable fuel or buy credits, called RINs, that prove someone else did. Small refineries can petition to be exempted. When EPA set the 2026 and 2027 standards on 1 April 2026 (91 FR 16388), it projected that 2025 exemptions would excuse about 990 million RINs of obligations, and it added 70% of that, about 700 million RINs, back into the 2027 standard as a “reallocation volume.”
On 31 August 2026 EPA decided 34 petitions for 2025. It granted full exemptions to 18, half exemptions to 11, denied three and found two ineligible. By EPA’s estimate those decisions excuse 1.76 billion RINs, which is 770 million more than it had projected.
EPA granted more 2025 refinery exemptions than it planned for. Now it proposes making the rest of the market carry all of the 770-million-RIN gap.
The two options
- Equal split: add the extra 770 million RINs half to 2026 and half to 2027. The total-renewable-fuel reallocation volume would rise from 0.99 to 1.37 billion RINs for 2026 and from 1.04 to 1.43 billion for 2027. The total renewable fuel percentage standard would go from 15.50% to 15.71% (2026) and from 15.78% to 16.01% (2027).
- All in 2027: leave 2026 alone and add the whole amount to 2027. The 2027 reallocation volume would rise to 1.81 billion RINs and the 2027 standard to 16.23%.
Unlike the 70% share EPA used in April, both options reallocate 100% of the extra exempted volume. EPA says it is not reopening the April volumes and asks commenters to limit themselves to how it should respond to the 2025 exemptions.
Deadline knock-on
Because the proposal would revise the 2026 standards, EPA says it automatically triggers the RFS rule that extends the 2026 compliance reporting deadline, now 31 March 2027. The new date depends on whether EPA finalizes, withdraws or sits on the proposal. EPA expects no effect on the 2027 deadline.
What this piece refuses
Do not write that EPA “raised the biofuel mandate” for 2026–27 in a final rule. This is a proposal with two options, and EPA says the underlying April volumes are not reopened. Do not write that pump prices will rise by 20 cents because of this rule. The roughly 19–22¢ diesel figure is EPA’s estimate of the whole RFS against a no-RFS baseline. The change proposed here is under one cent. The 1.76 billion RIN figure is EPA’s estimate from petition data; EPA says reported 2025 volumes will be used in the final rule.
Bottom line
Verified as of 16 October 2026 from the published Federal Register entry for FR Doc. 2026-21155 and EPA’s rule page: EPA proposes reallocating an additional 770 million RINs from 2025 small refinery exemptions, either split between 2026 and 2027 or all in 2027, at an estimated added cost of under one cent a gallon. Watch the 4 November hearing, the 4 December comment deadline, and whether the final rule uses reported 2025 data that change the 770 million figure.
