(Reuters) - The Trump administration has indefinitely delayed a proposed overhaul of U.S. biofuels policy aimed at reducing costs for the oil industry, under pressure from corn state lawmakers who worry the move would undermine demand for ethanol, according to two sources familiar with the matter.

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The White House had been poised to announce the reforms to the U.S. Renewable Fuel Program early this week after hosting months of difficult negotiations between representatives of the key constituencies.

“The announcement won’t be happening,” one of the sources said. The second source said the deal had apparently collapsed. Both sources asked not to be identified discussing the matter.

The RFS requires oil refiners to mix increasing volumes of biofuels like ethanol into the nation’s fuel each year, and prove compliance by earning or acquiring blending credits that must be handed in to the Environmental Protection Agency.

The law has helped Midwest corn farmers by creating a 15-billion-gallon-a-year market for ethanol, but refining companies have complained it incurs steep costs for them.

The White House deal would have eased pressure on the refining industry by allowing biofuels exports to count toward the annual volumes quotas. It would also have expanded sales of high-ethanol gasoline in a concession to biofuels producers.

Republican Senators Chuck Grassley and Joni Ernst of Iowa both praised President Donald Trump on Twitter on Tuesday evening.

“@realDonaldTrump has said he loooovves the farmers! #Iowa is feeling that love today, as the President just assured me he ‘won’t sign a deal that’s bad for farmers!’ Thank you Mr. President,” wrote Ernst.

“Pres Trump helped farmers by rejecting bad ethanol deal. I appreciate. GREAT NEWS,” wrote Grassley.

Bob Dinneen, head of the Renewable Fuels Association, said: “We are happy the President continues to recognize the importance of our industry to America’s farmers and rural economies across the nation.”