By Stephanie Kelly and Jarrett Renshaw

NEW YORK, July 2 (Reuters) - U.S. lawmakers introduced a bill on Friday to limit exemptions offered to refiners on blending biofuels, after sources said the Environmental Protection Agency chief voiced disapproval about a Supreme Court ruling upholding broad use of the waiver program.

Republican Congressman Randy Feenstra of Iowa and Democrat Congresswoman Angie Craig of Minnesota introduced a bill to restrict the EPA's ability to grant waivers, after the Supreme Court overturned a lower court decision that had imposed limits.

U.S. biofuel policy has been a battleground between the oil and corn industries for years. It has created a large market for corn-based ethanol that has helped farmers but petroleum refiners say it adds costs because they either have to invest in biofuel blending businesses, which smaller refiners say is not a viable option, or buy credits from refiners which already blend.

The lawmakers said they wanted to clarify existing law and restrict waivers, which exempt refiners from obligations to blend biofuels, to a few plants. Some refiners have consistently been able to secure waivers since the program began a decade ago. The new limits could effectively end the waiver program.

The Supreme Court ruled in June that, under current law, refineries were eligible for waivers regardless of when they applied.

"We must erase ambiguities and ensure oil refineries are not able to take shortcuts when it comes to blending biofuels," Feenstra said.

Lawmakers in farming states have pressed the U.S. administration to uphold mandates requiring refiners to blend biofuels. The EPA is expected to make a decision soon on the amount of biofuels refiners must blend during 2021 and 2022.

Democrat lawmakers met EPA chief Michael Regan on Tuesday after reports that the administration was considering giving relief to refiners from the mandates. Craig, Iowa's Cindy Axne, and Cheri Bustos and Lauren Underwood from Illinois were among those in the meeting.

Sources said Regan told them he disapproved of the Supreme Court ruling and said a decision on how much biofuel refiners would be required to blend was expected in the next few weeks, although he did not give them details.

EPA spokesperson Nick Conger confirmed the EPA met the lawmakers but declined to give details about the talks.

Lawmakers representing refinery workers have also been lobbying the administration, saying the obligations were hurting refineries and could drive them out of business.

The New Jersey State Senate this week passed a resolution calling on the EPA to reduce mandates to relieve refiners. (Reporting by Stephanie Kelly and Jarrett Renshaw; Editing by Edmund Blair)