The Environmental Protection Agency granted dozens of new Small Refinery Exemptions from 2025 Renewable Fuel Standard blending requirements. Geoff Cooper, the president and CEO of The Renewable Fuels Association, said the agency had received 34 Small Refinery Exemption requests and acted on them this week.
“Those refiners were seeking exemptions from their Renewable Fuel Standard blending obligations. So, basically, they are asking EPA to be excused or let out of their legal obligation to blend renewable fuels like ethanol and biodiesel. EPA finally issued decisions on those petitions, and unfortunately, they approved 29 of those 34 petitions and let 29 oil refineries escape their blending obligations under the Renewable Fuel Standard.”
The refiners claimed they were experiencing “disproportionate economic hardship” because of the RFS obligations.
“We think that is nonsense. There is no rationale. There’s no justification for giving those exemptions to those refiners when we all know that the refining sector today is making record profit margins. They’re making more money than they ever have in history, so to argue to EPA that they somehow are experiencing hardship and need to be let out of their ethanol and biodiesel blending obligations just doesn’t pass the sniff test.”
He talked about the effects of EPA’s decision on the ethanol industry.
“The effect of that decision would essentially be to reduce the Renewable Fuel Standard volumes by about 800 million gallons, if that’s the only action EPA took. The good news is, at the same time they granted these exemptions, EPA said we’re going to shift that exempted volume, that 800-plus-million gallons, make larger refiners account for that, and so they’re essentially taking away the obligations for one set of refiners and adding those obligations to larger refiners. That’s what they’re proposing to do, anyway. If that proposal is finalized and implemented, there shouldn’t be any net loss in renewable fuel demand.”
Cooper expressed concern that EPA might be “robbing Peter to pay Paul” in putting more obligations on larger refiners in the future.
“That is essentially what EPA is proposing to do. They did two things yesterday, and one of those was a final action, and that’s these exemptions. And then they propose to shift that volume requirement, that biofuel-blending volume requirement, from those exempted refiners to larger non-exempt companies. And, from the outside looking in, we don’t really think that’s fair to those larger refiners. We’re glad that that’s what EPA is doing. We don’t want to see any of this volume being lost. But we’ve had the RFS in place for more than 20 years, and there’s been plenty of time for every refiner in the country, whether they’re large or small, to figure out how to comply with the RFS program and make the investments necessary to do that. Most of the refining sector has done that, but you’ve got a couple dozen small refineries, so-called small refineries, that have just refused to make those investments and modernize their operations.”