The headline’s “at least half” described a preliminary plan reported by Reuters on February 26, 2026—not a final EPA decision. EPA later finalized a 70% reallocation of renewable fuel obligations exempted for 2023–2025, assigning those volumes to the 2026 and 2027 compliance years. A separate set of decisions on 2025 exemption petitions came in August 2026 and is not part of that finalized 70% action.
What happened to the “at least half” plan?
Reuters reported on February 26, 2026, citing three unnamed sources, that EPA had settled on shifting at least half of the biofuel obligations waived for 2023–2025 to larger refiners. Reuters also said the plan was preliminary and could change before formal release. It was not an EPA announcement or a final percentage. Reuters’ February 26 report
EPA’s later final action set the share at 70% for that 2023–2025 exemption cohort. The rule moves those reallocated volumes into the 2026 and 2027 compliance years. Thus, the February report was directionally consistent with the eventual action, but “at least half” was not the final figure. EPA’s final rule
How biofuel waivers and reallocation work
Under the Renewable Fuel Standard, obligated fuel parties generally meet renewable volume obligations (RVOs) by blending qualifying renewable fuel or acquiring Renewable Identification Numbers (RINs), the credits associated with qualifying fuel. Eligible small refineries can petition for full or partial relief on economic-hardship grounds.
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When EPA grants an exemption, the affected refinery’s obligation is reduced or removed. Reallocation restores some of those exempted volumes to obligations that larger obligated parties must account for in later compliance years. It does not mean every large refinery receives an identical assignment; the rule sets an obligation across the regulated system.
Why EPA chose 70% for the earlier exemption cohort
EPA’s September 2025 supplemental proposal considered reallocating either 100% or 50% of the 2023–2025 exempted obligations and invited comment on other amounts. The final rule selected 70%. EPA’s supplemental proposal
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EPA said the partial reallocation was intended to prevent exemptions from significantly and negatively affecting biofuel demand in 2026 and 2027, while preserving carryover RINs needed for a liquid, smoothly functioning credit market. That is the agency’s stated rationale, not proof that the rule produced a particular market or price result. EPA’s final rule
A separate 2025 petition decision came later
In August 2026, EPA decided a separate set of small-refinery petitions for the 2025 compliance year. It announced decisions on 34 petitions on August 31: 18 full exemptions, 11 partial exemptions, three denials and two ineligible petitions. EPA’s 2025 petition decisions
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EPA said those decisions exempted 1.76 billion RINs for 29 refineries. The agency also said its earlier “Set 2” estimate had included 990 million RINs for 2025 exemptions and that actual exemptions exceeded that estimate. These figures concern 2025 petitions; they should not be confused with the 70% reallocation finalized for the 2023–2025 cohort. EPA’s announcement on 2025 exempted volumes
EPA said it intended to propose reallocating 100% of the difference between projected and actual 2025 exempted volumes into 2026 and 2027 RVOs before the end of October 2026. The cited announcement establishes an intended proposal, not a final additional rule. EPA’s announcement on 2025 exempted volumes
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What the policy means for refiners, biofuel producers and consumers
Reallocation means larger obligated parties must account for more renewable fuel volumes than they would if the exempted obligations simply disappeared. The practical effect depends on the applicable compliance-year obligations and how parties meet them, including through RINs.
Reuters reported that biofuel groups supported full reallocation, arguing it would benefit biofuel producers and farmers growing feedstocks. Refiners opposed added obligations, warning of higher compliance costs and possible increases in pump prices. Those are stakeholder positions and forecasts; the cited reporting does not establish that reallocation caused a particular change in fuel prices or production. Reuters’ February 26 report
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The central policy trade-off is between restoring waived volumes to support biofuel demand and retaining enough carryover RINs for market liquidity. EPA’s final 70% choice reflects its stated attempt to balance those concerns; it does not resolve whether the costs or benefits will fall evenly across companies or consumers.
EPA’s stated policy framing
In its March 27, 2026 announcement of the Set 2 final rule, EPA Administrator Lee Zeldin said: “For 20 years, this program has diversified our nation’s energy supply and advanced American energy independence.” This is the administration’s policy framing, not an independent evaluation of the program’s effects. EPA’s March 27 announcement
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