The American Soybean Association (ASA) has warned that expanding exemptions for small oil refineries under the Renewable Fuel Standard (RFS) could lead to a sharp fall in domestic demand for soybean oil and hurt soybean farmers across the US, UkrAgroConsult reported.
Estimates indicate that exemptions for the 2025 compliance year could cross 1.8 billion RIN credits, almost twice the volume earlier assumed by the US Environmental Protection Agency (EPA).
The ASA said a significant increase in refinery exemptions could reduce demand for biomass based diesel by around 500 million gallons. This could result in an estimated $1 billion loss in revenue for US soybean farmers.
The issue is significant for the soybean market as biomass based diesel has emerged as an important source of domestic demand for US soybean oil. Higher biofuel production supports soybean crushing activity and soybean prices. A reduction in mandated biofuel use could therefore weaken demand for soybeans.
The concern comes after the US administration approved a substantial increase in mandatory biofuel blending volumes for 2026 to 2027 earlier this year. The ASA fears that widespread refinery exemptions could offset the benefits of the higher blending requirements and reduce the expected increase in demand for US soybeans.
The ASA has urged the US administration not to expand refinery exemptions beyond the levels considered by the EPA while setting the current blending requirements.
The association warned that any further decline in biofuel demand could add to the pressure already facing US soybean farmers and reduce the market support expected from higher blending mandates.
