API, Ethanol Groups Clinch Deal on US Biofuel Bill

January 20, 2026

Print This Article Share it With Friends

by Cole Martin (Argus Media) The American Petroleum Institute (API) and ethanol groups have agreed on reforms to US biofuel policy that they would like to see, teeing up a last-minute lobbying campaign to get the provisions included in federal budget legislation this month.

API and ethanol supporters that include the Renewable Fuels Association and Growth Energy have aligned around limiting refineries' future exemptions from biofuel mandates and making some changes to a bipartisan bill that would permit a higher-ethanol gasoline blend, according to four people familiar with the deal and draft text shared with Argus.

The groups' final framework — which they will pitch to lawmakers in the hopes of swiftly adding it to government spending bills this month — would authorize sales of up to 15pc ethanol gasoline (E15) year-round. Summertime sales of ethanol blends above 10pc are restricted in most of the US because of rules meant to minimize smog.

If passed into law, the deal would be a major victory for ethanol producers who have long claimed wider access to the typically-cheaper blend would benefit farmers and drivers alike. Oil majors have grown more comfortable with E15 too, preferring consistent nationwide rules to costly workarounds like a looming shift in the midcontinent to a boutique fuel blend that would allow more ethanol.

While the E15 fix would take effect immediately, the energy groups want to keep existing rules around biofuel quotas and exemptions in place through 2027. Under the current system, the Environmental Protection Agency (EPA) requires oil companies to blend minimum volumes of biofuels while allowing hardship exemptions for some small refineries that annually process no more than 75,000 b/d of crude.

Starting in the 2028 compliance year, relief would be awarded only to companies that process 75,000 b/d or less across all their refineries and that also maintain that eligibility each year. These smaller facilities would win automatic 75pc exemptions from biofuel quotas starting in 2028 without having to apply each year, effectively ending discretion for regulators to choose which refineries deserve exemptions.

Under the proposal, EPA starting in 2028 also would not require larger oil companies blend more biofuels to offset exemptions granted to their smaller rivals.

This longer phase-in would address concerns from some energy lobbyists that more immediate changes could delay EPA's work to finalize new blend mandates. The agency wants to finalize new blend quotas for 2026 and 2027 in the coming weeks.

Fuel fight

The draft bill's text could change as lobbyists pitch the agreement to lawmakers and try to minimize backlash from oil refiners, people familiar with the matter said. But there is little time for more negotiations, with advocates of the deal pushing Congress to include it in legislation to fund government agencies after 30 January. Lawmakers have expressed similar urgency.

There may be "news soon" on updates to the existing E15 bill draft, bill sponsor and US senator Deb Fischer (R-Nebraska) said in an online interview with Brownfield Ag News this week.

The current deal would be a substantial blow to refiners that have won exemptions for small units in the past but run too many larger facilities to qualify under the proposed rules, including independent refiners Delek and Par Pacific. Other merchant refiners worry that the biofuel lobby will use wider ethanol access as a pretext to push for higher blend mandates in future years, which they say risks refinery closures.

The American Fuel & Petrochemical Manufacturers chief executive told Argus this week that his refinery members were divided over E15 talks. API had surprised its traditional oil refining allies last year by teaming up with ethanol interests on a larger biofuel policy package.

Other biofuel producers have long wanted tighter restrictions on hardship waivers than the latest deal, another hiccup for negotiations. Particularly controversial among farm advocates is a holdover provision from the current E15 bill to grant some small refiners active credits they can use toward future mandates.

API, the Renewable Fuels Association and Growth Energy as well as chief Senate bill sponsors Fischer and Shelley Moore Capito (R-West Virginia) did not immediately reply to requests for comment. READ MORE

Related articles

Lawmakers Draft Fuel Rules in Possible Hit to Some Refiners (Bloomberg Law)
Biofuels industry awaits EPA’s final blending rule (Brownfield Ag News; includes AUDIO)
Biofuels Groups, API Seek Vehicle For New Deal On E15, RFS Waivers (Inside EPA)
Daybreak Jan. 20: Agreement reached on E15 – but there's some pushback (Agri-Pulse)
Illinois Calls for Federal Action for Year-Round E15 Fuel (State of Illinois)
Advancing E15 policy opens doors for other biofuels (Brownfield Ag News)
NCGA says year-round E15 left out of congressional package (Brownfiels Ag News)
Ethanol, amendment disputes in GOP holdup minibus funding bill (The Hill)
Ethanol deal in sight as GOP leaders haggle over funding bill (Politico)
House Republicans Strike Deal to Establish E15 Fuel Council (Bloomberg Government)

Excerpt from Inside EPA: However, the language -- which is expected to revise legislation known as the Nationwide Consumer and Fuel Retailer Choice Act, which Sen. Deb Fischer (R-NE) introduced in 2025 -- did not make the interior and environment appropriations bill the Senate approved Jan.15. As a result, supporters are now looking for an alternative legislative vehicle, such as upcoming transportation or farm bills, sources say.

...

Biofuels sources suggest that the change would be broadly beneficial, and popular.

Refiners such as Marathon, Phillips 66, and Chevron would lose the ability to apply for waivers for their refineries that meet the current definition.

“But these companies, and many other large and mid-sized refining companies, support the legislative change currently under consideration, as it would create a more level playing field in the oil refining sector,” biofuels advocates say in remarks urging lawmakers to support the bill.

This explains the support of API, which initially backed a year-round authorization of E15 in 2025, only to withdraw support for a preexisting bill and seek a different compromise, citing changed federal policy on the RFS, biofuel imports, waivers and tax incentives.

“Of the 48 companies operating refineries in the United States, the overwhelming majority support, or would benefit from, the proposed legislative change,” biofuels sources say. Refiner Opponents But “a much smaller group of mid-sized refining companies appear to be opposing the change.

It appears that just 6-7 multi-billion [dollar] refining companies are opposing the policy change, while the remaining refining companies -- including truly small refiners -- support it.”

Biofuels advocates cite companies resisting the draft deal as: Delek US Holdings, which operates plants in Texas, Arkansas and Mississippi; Par Pacific, which operates four facilities in Hawaii, Montana, Washington, and Wyoming; HF Sinclair, with eight refineries across multiple states; Suncor, a Canadian company with a plant in Colorado; CVR/Icahn Enterprises, with plants in Oklahoma and Kansas; and Cenovus, another Canadian-based energy company, operating two U.S. refineries in Ohio and Wisconsin.

“Far from experiencing ‘economic hardship,’ these companies have often outperformed their peers financially in recent years, due in large part to the windfall resulting from” waivers, advocates of the new bill claim. But other refiners are pushing back, with some in the sector claiming that under the proposal, as many as two-thirds of refineries that currently qualify for waivers -- provided they can demonstrate disproportionate economic hardship -- would not do so under the draft bill.

Lawmakers with refineries in their states and districts are likely to resist the waiver changes, sources say. The fight over future waiver policy comes as numerous refiners are suing EPA over its partial approvals or denials of waiver petitions. READ MORE

Excerpt from State of Illinois: The State of Illinois is again calling on the United States Congress and the Trump administration to require year-round sales of E15 fuel. Earlier this year, Governor JB Pritzker sent a letter to Congressional leadership on November 4, 2025, urging nationwide, year-round E15.

“Agriculture is the number one industry in Illinois. Our farmers feed the world, and they have the potential to fuel it as well. As Trump’s tariffs hurt farmers nationwide and rising costs put strain on American families, Congress must require permanent, year-round E15, said Governor JB Pritzker. “E15 enhances our nation’s energy supply, helps the economy, and supports a cleaner environment all at once. Year-round E15 is not optional — it’s essential. That’s why I was the first Governor in the corn belt to sound the alarm for Congress in November. I once again urge the federal government to act in favor of our farmers and the environment.”

Under current law, E15 access during the summer driving season has relied on temporary emergency waivers. These stopgap measures provide only brief relief and fall short of a stable, long-term solution.

Illinois is the second largest producer of corn in the nation. With corn production at record highs – the USDA crop estimate puts corn crop estimates above 17 billion bushels for the first time, up from 14.9 billion bushels in 2024 – the surplus inventory drives prices down, hurting farmers already struggling to break even amid rising input costs. Corn prices hit the lowest price since August after the USDA made its announcement.

A year-round requirement for E15 would increase demand for corn by 2 billion bushels a year, according to a new report from the Renewable Fuels Association.

While ethanol use supports jobs, lowers fuel costs and reduces emissions, federal regulations continue to block E15 sales during critical summer months, creating unnecessary uncertainty for farmers.

“Illinois is a national leader in corn and ethanol production. Year-round E15 would keep energy dollars in the Midwest, reduce reliance on foreign oil, and cut harmful emissions without additional cost to taxpayers,” said Jerry Costello II, Director of the Illinois Department of Agriculture.

Allowing nationwide, year-round use of American ethanol is a practical solution that strengthens the energy supply, reduces costs for consumers, and provides the long-term certainty that Illinois farmers deserve.

“Illinois farmers cannot afford to do business. The best solution is a stronger economy,” said U.S. Senator Dick Durbin (D-IL). “First, the President must stop these trade wars that are damaging our top farm export markets. Second, Congress must pass permanent E15, which will immediately help farm families, while cutting the cost of gasoline for everyone by up to 30 cents a gallon. As a member of the Senate Agriculture Committee, I will fight to get E15 finished now.”

“Illinois farmers are the backbone of our economy and the stewards of America’s food and fuel supply. Year-round E15 isn’t just an agricultural issue; it’s an economic, environmental, and national security imperative. By adopting a permanent, nationwide E15 standard, we can lower costs for families, strengthen rural communities, and reduce our dependence on foreign oil. Congress must deliver the certainty our farmers and consumers deserve,” said Rep. Jonathan Jackson (Il-01).

"I have been fighting in Congress for several years to secure year-round, nationwide access to E-15, including cosponsoring the Nationwide Consumer and Fuel Retailer Choice Act," said Rep. Robin Kelly (Il-02). "While temporary waivers for midwestern states have helped maintain the ethanol industry, it is past time to allow the sale of year-round E-15 across the country. At a time when affordability is top of mind for Illinoisans, homegrown biofuels will lower fuel prices, reduce emissions, and provide support for our farmers as they navigate President Trump's challenging tariffs."

“Illinois farmers are producing more than ever, but Washington’s stop-and-go approach to E15 keeps holding them back,” said Congressman Raja Krishnamoorthi (IL-8). “Making E15 available year-round would strengthen our energy supply, lower costs at the pump, and provide the certainty corn growers need to stay competitive. It’s a practical, pro-farmer solution—and it’s time for federal action.”

“I have long been a strong advocate for year-round E15, having seen firsthand the benefits it delivers to consumers at the pump and to the farmers in my district,” said Congresswoman Nikki Budzinski (Il-13). “As co-chair of the Biofuels Caucus in Congress, I will continue leading the charge for federal legislation that provides a permanent solution and long-term certainty for our growers.”

“Year-round E15 is a win for Illinois farmers and for families feeling the pinch at the pump. It creates steady demand for our corn, supports rural jobs, and gives drivers a cleaner, more affordable fuel choice,” said Congressman Eric Sorensen (IL-17). “Congress and the administration need to act so producers and consumers can count on certainty, not short-term fixes.”

Illinois Calls for Federal Action for Year-Round E15 Fuel READ MORE

Excerpt from Brownfield Ag News: The National Corn Growers Association says it’s disappointed that legislation authorizing a higher blend of ethanol wasn’t included in the latest round of Congressional spending bills.

Lesly McNitt, vice president of public policy, says nationwide, year-round E15 was dropped, again. “We thought we had a deal.”

On Monday, the House and Senate released drafts of the appropriations bills and they didn’t include the legislation. But, McNitt tells Brownfield, there might still be a chance. “We’re going to fight like hell to get E15 in one of these appropriations packages that are moving through Congress right now. In today’s political environment there are only a few bills that actually move and have a good chance of passage. That makes it harder to get things done for farmers, so we’re saying it’s now or never.”

She says farmers are tired of disappointment and are in Washington D.C. this week lobbying Congressional leaders for the measure. READ MORE; includes AUDIO

Excerpt from The Hill: Republican disputes over year-round ethanol sales and other proposed amendments delayed advancement of a package government funding bill on Wednesday.

The House Rules Committee ended an extended recess on Wednesday evening as Republicans who control the panel considered which amendments to make in order on bills to fund the departments of Defense, Health and Human Services, Education, Transportation, Housing and Urban Development, and Homeland Security.

The panel is expected to return to session at 7:30 a.m. on Thursday, two GOP sources told The Hill — the same day leaders hope to pass the last slate of funding bills.

One major issue GOP leaders faced during the day was requests from midwestern Republicans to authorize year-round sales of E15 ethanol, a fuel blend with 10.5 percent to 15 percent ethanol blended with gasoline that has historically been restricted in the summer due to concerns about smog. Rep. Zach Nunn (R-Iowa) introduced an amendment to add a provision to the appropriations package to allow year-round E15 sales.

Speaker Mike Johnson (R-La.) told reporters earlier on Sunday that he was meeting and working with Republican members from heavily agricultural districts to resolve the matter, signaling that they might strike a deal on a different piece of legislation.

“The E15 issue is a very big policy priority for them. It’s a time sensitive matter, and it’s one that we really need to get done in this Congress,” Johnson said. “We’ll be working with all sides of the conference, all the various factions and interests on this to make sure that we can thread that needle and get the job done.” READ MORE

Excerpt from Politco: GOP leaders are nearing a potential compromise with farm-state Republicans that will allow a $1.2 trillion government funding packageto move forward Thursday after a key ethanol provision was omitted, according to four people granted anonymity to comment on private negotiations.

Speaker Mike Johnson is discussing whether to include the provision allowing year-round sales of E15 fuel in a supplemental spending bill the Senate is working on moving this year to help farmers with tariff impacts or passing a separate House measure in the coming weeks. Separately, GOP leaders are working through issues with House Freedom Caucus members over possible amendment votes, according to two of the people and three other people granted anonymity to describe the deliberations.

About a dozen House Republicans met with Johnson about the matter late Wednesday morning, some of whom had threatened to oppose a procedural move vote to advance the funding package Thursday unless Johnson added on the E15 provision. Key farm and energy groups also pushed for the measure to be included at a meeting with White House officials Wednesday.

But those groups came away from the meeting with no commitments from the Trump administration, according to two other people granted anonymity to describe the private meeting. White House officials told the groups that including E15 in the supplemental package would be a better option for ethanol proponents than the funding bill now headed for passage, explaining the administration did not want to risk a government shutdown over the issue.

House Majority Leader Steve Scalise told reporters Wednesday evening he did not expect the base text of the bill to change before it is called up on the floor Thursday, meaning the ethanol provision would have to find another path to enactment. READ MORE

Excerpt from Bloomberg Government: House Republican leaders struck an agreement with Midwestern GOP lawmakers to establish a rural energy council focused on E15 biofuel, resolving a conflict that threatened to derail the latest government funding package.

The E-15 Rural Domestic Energy Council would be created by the rule to set up debate on the spending package slated for a Thursday House vote. The council is directed to submit legislative proposals to Congress no later than Sunday, Feb. 15, with the goal of considering legislation no later than Wednesday, Feb. 25.

The House Rules Committee will meet Thursday on the council, and will consider a ... READ MORE