ASA Sounds Alarm on EPA Refinery Exemptions That Could Cost Soybean Farmers $1 Billion

The American Soybean Association is pressing the Trump administration to reject a proposed change to how small refinery exemptions are calculated under the Renewable Fuel Standard, warning the move could erase roughly 500 million gallons of biomass-based diesel demand and cost soybean farmers about $1 billion.

In an Aug. 25 press release, ASA said reports and analysis indicate small refinery exemptions for the 2025 RFS compliance year could total more than 1.8 billion Renewable Identification Number (RIN) credits under a newly revised methodology EPA is developing, nearly double what the agency assumed when it finalized the 2026-2027 Renewable Volume Obligation rule earlier this year. That rule had included historic increases in biofuel blending volumes, an increase ASA had praised as a boost to domestic soybean demand.

ASA Vice President Dave Walton, a soybean farmer from Iowa, said in the release that farmers cannot withstand losing that demand now. “At a time when soybean farmers are already struggling to support our farms, we cannot afford for the rug to be pulled out from under one of our most important sources of domestic demand,” Walton said. “We hope the President and White House maintain their commitment to U.S. farmers and reject proposed actions that destroy these newly expanded markets in exchange for a giveaway to oil refiners.”

Speaking Friday morning on Agriculture of America, Walton described the situation in more personal terms, comparing it to Lucy pulling the football away from Charlie Brown at the last second. “We had a really good plan in place,” Walton said. “We saw a run up in the soybean market, especially based on that new demand. And then this new announcement really kind of takes that away.”

Walton put the loss in on-farm terms, too. He estimated the added exemptions would cost him personally about 22 cents a bushel, on top of already tight margins. “Margin squeeze is real right now,” Walton said. “And this was kind of a glimmer of hope for us. Now it seems uncertain.”

ASA is urging the administration to cap exemptions at the levels EPA itself estimated using historical market data when it published the current blending rule, rather than adopting the broader new methodology. Walton told Agriculture of America that, short of denying the exemptions outright, EPA has two options to limit the damage: reallocate any exempted gallons to other obligated parties so total biodiesel demand doesn’t shrink, or build expected exemption volumes into future Renewable Volume Obligations so the industry’s baseline demand holds steady.

Both ASA and Walton framed the exemptions as working against the administration’s own stated goals. The press release said the move would “run counter to the administration’s stated goals of strengthening American energy dominance, expanding domestic energy production, and supporting rural economies.” Walton added that the uncertainty is already affecting investment decisions at the plant level. “That uncertainty really gives them pause when they start to think about, do I expand? Do I not expand? Do I build a new plant?” he said. “And that’s bad for us as farmers because that’s where our demand goes.”

Walton also argued that small refinery exemptions have drifted from their original purpose. He said they were meant as a temporary compliance bridge for small refiners without easy access to biofuels, not a standing exemption. “That’s not happened, and that needs to happen,” he said.

***WATCH*** The full interview with Dave Walton from ASA below: