New E15 plan ties access to refinery waivers

US lawmakers have unveiled draft language in the Senate Agriculture Committee’s farm bill that targets both gasoline sold with higher ethanol content and compliance with federal biofuel blending rules. The proposal would expand sales of higher‑ethanol gasoline, often referred to as E15, while maintaining a path for certain small oil refineries to continue receiving exemptions from annual blending mandates if they have received such waivers in the past.

Embedding the measure in the farm bill brings biofuel policy directly into a broader agricultural package, positioning ethanol market access and refinery compliance as part of the same legislative negotiation. The approach is designed around pairing broader availability of higher‑ethanol fuel with a defined framework for handling small‑refinery obligations.

The new draft represents a marked shift from earlier plans that would have sharply reduced exemptions for small refineries. Instead of cutting these waivers, the current language preserves exemptions for facilities that have previously qualified, signaling a different balance between supporting biofuel demand and easing compliance for certain refineries.

By keeping exemptions in place for some small refineries, the proposal alters expectations that the next legislative step would involve large reductions in such relief. This change in direction is a central feature of the updated text and is likely to shape subsequent debate over how burdens from blending mandates are distributed across the fuel industry.

A key provision in the draft would allow regulators to require companies that do not receive small‑refinery exemptions to offset their competitors’ exemptions. This offset requirement would apply over the first 500 million gallons of exempted biofuel, effectively redistributing part of the compliance responsibility to non‑exempt market participants.

This mechanism is intended to ensure that total biofuel use is less affected by exemptions, even as some refineries continue to receive relief from blending mandates. It also clarifies how exempted volumes would be treated within the overall compliance system, creating an additional layer of obligation for firms that remain fully subject to the rules.

The combination of wider E15 sales and preserved small‑refinery exemptions sets the terms for the next phase of policy discussion. The draft lays out a structure in which increased access to higher‑ethanol gasoline is linked to a defined, and partially offset, exemption regime for certain refineries.

As the Senate Agriculture Committee moves toward further consideration of the farm bill, this proposal establishes a starting framework for negotiations over how much to prioritize expanded biofuel use, how to treat smaller refineries, and how to handle the distribution of compliance costs across fuel suppliers.