US Finalizes Higher Biofuels Quota to Boost Domestic Demand
(Bloomberg) -- The Trump administration unveiled long-awaited biofuels blending standards, imposing a stronger mandate than a plan proposed last year in a further show of support for producers and American farmers.
The rule requires refiners to mix a record 25.82 billion gallons of biofuels into conventional diesel and gasoline this year, almost 8% higher than was advertised last June, the Environmental Protection Agency said.
Both the oil and agriculture sectors have been anxiously awaiting President Donald Trump’s administration’s finalization of the quotas. Biofuels are seen as key to lifting incomes for farmers struggling with low crop prices and high input costs. Continued deferral of a decision had weighed on demand for the fuel, with crop trader Archer-Daniels-Midland Co. saying last month that the timing of “policy clarity” would largely determine its outlook for 2026.
The war with Iran has boosted calls for increased biofuels use. Advocates say that amid gasoline price spikes, blending more biofuels can help temper costs at the pump. Some small and mid-sized refiners, however, caution that blending biofuels is a big expense for them and it would increase their costs to produce. And analysts have said that energy prices are unlikely to meaningfully subside until the end of the effective closure of the Strait of Hormuz, a crucial waterway for shipments.
Speaking at a White House event Friday to mark National Agriculture Day, Trump called the move a “dramatic update to the renewable fuel standards.”
“These new standards will generate over $10 billion of rural economic benefit, create an estimated 100,000 new jobs and massively increase our nation’s energy supply,” Trump said.
Shares of biofuel producers and crop traders climbed on the news. ADM jumped as much as 2.6%, Bunge Global SA added as much as 4.6% and Green Plains Inc. rose as much as 8.7%.
It’s still unknown whether and how the administration will grant more small refineries’ bids to be exempted from quotas for last year. But the issue has created a rift within the oil industry. Large refiners want fewer exemptions to be granted because they have to bare the cost, while small and medium refiners want the exemption process to remain the same.
Under the EPA’s proposal, 70% of exempted volumes would be reallocated to those who didn’t win the breaks.
Hosting Farmers
At the White House, Trump hosted farmers and executives from agriculture companies. The administration has been focusing on farmers — a key voting block that has generally supported Trump — to help alleviate pressures from the president’s tariff policies and attacks on Iran. Trump in December announced a $12 billion aid package for struggling farmers.
In a further effort to bolster corn farmers and biofuels producers, the EPA said Wednesday it will waive higher-ethanol E15 gasoline from US volatility requirements this summer. The move will allow for expanding sales, giving drivers more options and delivering a bigger domestic market for farmers. Ethanol producers and some fuel refiners have been pushing for more permanent change, seeking year-round sales of E15, but legislation efforts have repeatedly stalled.
At the event on Friday, Trump said he’s seeking congressional action to allow E15 fuel waivers all year round.
In a separate move to aid farmers, Trump also confirmed that the Small Business Administration will launch a “massive” new loan guarantees program for farmers and food suppliers. Guarantees will be available for vegetable, grain, seed farmers, cattle, pig and poultry producers, and grocery wholesalers, he said.
(Adds reallocation details in starting in eighth paragraph.)
©2026 Bloomberg L.P.
