LINCOLN, Neb. (DTN) -- The Trump administration proposed a record 24.02 billion gallons of biofuels be blended in 2026, with biomass-based diesel seeing a more than 2-billion-gallon jump from 2025 to 5.61 billion gallons in 2026, in a Renewable Fuel Standard proposal released Friday.

Biomass-based diesel was the big story as the EPA proposal also calls for another bump in 2027 to 5.86 billion gallons. The much-anticipated proposal would keep conventional corn-based ethanol at 15 billion gallons during the next two years.

The Trump administration's proposal is a significant step up compared to the Biden administration's multi-year rule that set biomass-based diesel volumes at 3.35 billion gallons in 2025. The industry has been calling for much higher RFS volumes to match actual production, at a time when biodiesel plants have been cutting back or closing production in light of lingering tax uncertainty.

On small-refinery exemptions, the EPA offered an evaluation of where things stand.

EPA said the total volumes requirements remain the same regardless of SREs but the percentage obligations for non-exempt obligated parties increase when SREs are granted. So, the volume obligations would be achieved by fewer obligated parties.

"There is currently significant uncertainty regarding the number of small-refinery exemption petitions that could be granted for 2026 and 2027," the agency said in the proposal.

"We have yet to take further action on these petitions and are still determining how we will evaluate and decide those petitions, which would then inform how we would evaluate and decide any SRE petitions received for 2026 and 2027. We expect to communicate our policy regarding SRE petitions going forward before finalization of this rule."

EPA provides a range of potential gallons exempted for 2026 and 2027 from what it says are about 34 qualifying and operational small refineries that produce about 18 billion gallons of gasoline and diesel. To qualify for exemptions, the RFS requires small refineries to show disproportionate harm from having to meet their obligations.

Geoff Cooper, CEO and president of the Renewable Fuels Association, said the proposal was a good first step for biofuels producers and farmers.

"It represents an excellent starting point for the 2026 and 2027 RVO discussion," Cooper said in a statement.

"The entire supply chain is seeking certainty regarding EPA's plans on SREs and today's proposal helps to clarify the agency's approach moving forward. We agree that the agency has a legal obligation to reallocate any exempted blending volumes, consistent with the approach adopted by EPA near the end of President Trump's first administration. However, EPA's top priority for SREs should be maintaining a high standard for evaluating petitions and continuing to take a restrained and limited approach. The marketplace needs to be reassured that the RVOs published by EPA are real and will not be watered down or eroded by SREs."

American Coalition for Ethanol CEO Brian Jennings said the "stakes are high" for this next phase of the RFS.

"Ethanol producers and farmers are under tremendous economic pressure, particularly due to uncertainty caused by current efforts to reorder international trade and we need EPA to substantially increase domestic ethanol blending under the RFS in 2026 and 2027," Jennings said. "This rulemaking is a pivotal opportunity for the Trump administration to fully utilize the RFS statutory authorities by setting ambitious blending targets that reflect the critical role American ethanol plays in strengthening U.S. energy security, boosting rural economies and reducing prices at the pump."

Read more on DTN:

"EPA Finalizes Multi-Year RFS Volumes," https://www.dtnpf.com/…

"Clean Fuels Alliance America to Sue EPA on Renewable Fuel Standard Volumes Delay," https://www.dtnpf.com/…

Todd Neeley can be reached at todd.neeley@dtn.com

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