By Siddharth Cavale and Jarrett Renshaw
WASHINGTON, March 27 (Reuters) – The Trump administration ordered U.S. refiners on Friday to blend a record amount of biofuels into their gasoline and diesel this year and next, a move intended to help farmers but that the refining industry said would only backfire by raising pump prices already spiking due to the war in Iran.
The rebuke from the U.S. refining industry revealed a rare public rift between President Donald Trump’s White House and oil companies that have traditionally backed his efforts to bolster the fossil-fuel energy sector.
“It’s baffling, with fuel prices already rising due to the conflict in Iran, that EPA is finalizing a rule that will make things far worse for consumers,” said Chet Thompson, president and CEO of the American Fuel & Petrochemical Manufacturers.
“This is not what energy dominance looks like.”
Trump is seeking to consolidate support among the important agriculture and energy constituencies ahead of the November midterm elections while battling consumer inflation, most visible at the gasoline pump. Since the outset of the Iran war, average retail U.S. gasoline prices have risen to nearly $4 a gallon nationwide.
MOVE WELCOMED BY FARMERS
Under the U.S. Renewable Fuel Standard, oil refiners are required to blend billions of gallons of corn-based ethanol and other biofuels into the nation’s fuel pool each year, or buy tradable credits called RINs from those that do such blending.
A RIN typically corresponds to one gallon blended. Farmers and biofuel producers support the program as vital to American farm country, but refiners view it as a costly burden.
The Environmental Protection Agency on Friday said it set total 2026 biofuel obligations at 26.81 billion RINs and 2027 obligations at 27.02 billion RINs. The new obligations include 70% of around 2 billion gallons that had been waived in 2023-2025 under a program which allows exemptions for small refiners.
The EPA said the figures represent the highest blending requirements on record. The increases are focused on biodiesel and renewable diesel production, while keeping mandates for ethanol blending stable at 15 billion gallons per year.
“President Trump promised a Golden Age of American agriculture. Once again, his administration is delivering,” said EPA Administrator Lee Zeldin.
The EPA in June 2025 had proposed much lower obligations – 24.02 billion RINs in 2026 and 24.46 billion RINs in 2027 – without taking a position on what percentage of previously waived obligations should be reallocated.
The National Corn Growers Association welcomed Friday’s announcement, along with a decision by the administration earlier this week to expand the seasonal availability of gasoline with 15% ethanol, saying it would help farmers.
“Today’s announcement, coupled with the Trump administration’s E15 summertime waiver earlier this week, is a positive move for the nation’s corn growers who are navigating an exceptionally difficult economic environment,” the group said in a statement.
The Renewable Fuels Association, which represents ethanol producers, said however it had wanted 100% of waived volumes to be reallocated, rather than 70%.
AFPM’s Thompson said he believed U.S. biofuels mandates have already increased consumer pump prices by 25 cents a gallon, and that the new mandates would further raise them.
Diesel prices have risen even faster than regular gasoline; it is up to $5.38 a gallon from $3.76 a gallon a month ago, according to AAA figures.
The EPA also said that starting in 2028, foreign fuels and feedstocks will receive only half of the RINs of American-made products, a measure it said would help the domestic biofuel industry.
(Reporting by Richard Valdmanis and Daphne Psaledakis; Writing by Susan Heavey; Editing by Timothy Gardner and Peter Graff)
