UPDATE 1 — EPA proposes full reallocation of refinery biofuel exemptions

(Updates dateline, adds additional detail from EPA, RFA comment in paragraphs 5-8) By Siddharth Cavale CHICAGO, Oct 13 (Reuters) — The US Environmental Protection Agency proposed on Tuesday to make larger refiners blend more biofuels into their products over the next two years, a move that will likely appeal to farm-state voters ahead of November's congressional elections. The proposal would help offset concerns about lost demand for ethanol producers and farmers after the EPA announced in August it would waive renewable fuel volume obligations for 29 small refineriesthat argued the requirements would cause economic hardship. The EPA proposed reallocating 100% of those waived fuel volume obligations and is seeking public comment after putting forward two approaches. One would split the additional 2025 small refinery exemption volume evenly between the 2026 and 2027 compliance years, while the other would allocate all of it to 2027. Comments are due by December 4, 2026, the EPA said in a statement. Renewable credit prices for biodiesel and ethanol fell slightly on the news, according to a refinery trader at the OPIS biofuels conference in Chicago. The EPA in August decided to grant