The Senate bill would pair year-round E15 sales with a new formula for small-refinery relief. CBO says the resulting costs for other refiners could reach billions of dollars annually, but it could not calculate the burden on small refineries.
The Senate Agriculture Committee’s reported version of the Agricultural Act of 2026 covers the familiar farm-bill terrain: crops, conservation, nutrition, rural development and forestry. Tucked into its miscellaneous provisions is a fuel-policy package that would make E15 available year-round and change how the Renewable Fuel Standard’s small-refinery exemptions work.
The Congressional Budget Office’s estimate of the bill identifies a consequential cost shift inside that package. Beginning in 2028, EPA would have to reallocate most renewable-fuel obligations waived for qualifying small refineries to other refiners. CBO estimates the added compliance costs for those other refiners could be billions of dollars a year. It says it cannot determine the cost to small refineries themselves.
Those are private-sector compliance costs, separate from the bill’s overall budget estimate. CBO projects S. 5526 would increase the federal deficit by about $4.4 billion over 2027–2036. That figure is not an estimate of the fuel provision’s refinery costs.
Under current law, a small refinery can petition EPA for an exemption from RFS obligations if compliance would cause disproportionate economic hardship. Refiners and importers generally meet their renewable-fuel obligations by blending renewable fuels or acquiring renewable identification numbers, known as RINs, which can be traded.
Section 12501 would end new hardship-extension petitions for compliance years after 2027. It would replace that petition process with a production-based reduction for certain small refineries that had received an exemption and petitioned by June 1, 2026. The reduction would be capped by the refinery’s highest qualifying annual fuel production in 2023–2025, and by its actual production in the year the reduction applies. Production above the cap would remain subject to RFS requirements.
EPA would then reallocate the exempted fuel volume to other obligated parties, with a carveout: the agency would subtract a volume equivalent in energy content to 500 million gallons of conventional biofuel. The bill also tells EPA to reconcile its projected exempted volume with the actual amount in a later year. In short, the legislation would set a standing formula for refinery relief, but leave a substantial volume outside the reallocation requirement.
CBO says its estimate of the added costs to other refiners is based on industry data and EPA’s decisions on past exemption petitions. The public estimate does not provide a precise annual figure or show the underlying calculation. Nor does it identify how much each category of refiner could pay. The bill also directs EPA to return or credit certain RINs tied to 2016–2018 compliance years for refineries with qualifying old petitions. The legislation does not state the total value of those credits or name the companies that could receive them.
The fuel package joins two policies with overlapping but not identical constituencies. The Renewable Fuels Association welcomed the committee’s passage of the bill because it includes year-round E15, and the group has separately pressed EPA to reallocate all waived renewable-fuel volumes. The American Petroleum Institute supports year-round E15 and targeted relief for truly small refining companies, but its published position opposes shifting waived volumes onto other refiners after 2028. Those positions do not tell us whether either group supports the precise formula in S. 5526, including its 500-million-gallon-equivalent carveout.
That leaves several questions for the bill’s sponsors and EPA. Why did the formula reserve 500 million gallons’ worth of renewable-fuel obligations from reallocation? What data and RIN-price assumptions produced CBO’s estimate of billions in annual costs? Which refiners could receive the historic credits, and what are those credits worth? And how will EPA’s adjustments work if projected exemptions differ from actual refinery production?
CBO’s estimate does not say what the provision would do to prices at the pump, and the cost of compliance should not be presented as a direct consumer cost. The reporting question is more basic: Congress is proposing to redistribute renewable-fuel obligations on a scale CBO describes in billions, while leaving key parts of the distribution and calculation difficult to see. The farm bill may be sprawling by design. The cost ledger should still add up.
