RFS Small Refiner Exemptions Policy

The Environmental Protection Agency (EPA) reduces RFS obligations by hundreds of millions of gallons by granting retroactive exemptions to oil refiners. Refiners are allowed to sell or carry forward returned RIN credits, reaping a windfall while destroying demand for biofuels in the present year.

In the 2020 RFS rule finalized in December 2019, EPA recognized its duty to ensure the RFS volumes it sets each year are not reduced through these exemptions.

In January 2020, the U.S. Court of Appeals for the 10th Circuit ruled that EPA "opened a gaping and ever-widening hole" in the RFS program by abusing these exemptions. The court limited EPA's authority to grant exemptions only in cases where the RFS is the direct cause of hardship.

Clean Fuels is monitoring EPA as it considers small refinery exemption petitions -- there are pending petitions for every year 2011-2020. Clean Fuels continues to pursue several legal avenues to close the gaping hole in the RFS program caused by small refinery exemptions.

Clean Fuels works with its members to advocate to EPA to ensure RFS volumes for biodiesel and renewable diesel are made whole. Clean Fuels also asks Members of Congress to exercise oversight and ensure EPA follows the law in granting small refinery exemptions.

As our members communicate with Members of Congress, EPA and other Washington policy makers, the media, and the public, Clean Fuels works with them to amplify these points:

  • Just one small refinery exemption can eliminate demand for an entire biodiesel facility. A “small” oil refinery can produce up to 3 million gallons of fuel per day. It’s annual RFS obligation for biodiesel is only 20 million gallons, which is more than some small biodiesel plants produce in a year.
  • U.S. courts consistently find that EPA fails to fully or consistently explain its small refinery exemption decisions.
  • EPA began freely handing out small refinery exemptions before receiving the Congressional directives and Court decisions they currently cite as justification.
  • EPA has ignored Department of Energy recommendations regarding whether small refinery exemptions are merited.

 



Focus on SRE News


Clean Fuels Urges President to Support RFS and Rely on Biomass-Based Diesel to Replace Russian Oil

Mar 10, 2022, 12:55 PM
Letter details clean fuel’s consumer value and ability to meet demand.

WASHINGTON, DC – Today, Clean Fuels Alliance America sent a letter to President Biden pledging readiness to maintain homegrown fuel supplies, mitigate consumers’ economic pain, and speed the nation’s clean energy future in support of the administration’s ban on imports of Russian petroleum. The letter urges the administration to get the Renewable Fuel Standard back on track as a key policy driver of American energy independence.

“America’s biodiesel, renewable diesel, and sustainable aviation fuel producers are working hard to provide better, cleaner fuels that provide consumers value and extend the diesel fuel supply,” the letter states.

“Reducing availability of biodiesel and renewable diesel right now would impose higher costs on American consumers – both in the price of fuel and other goods today and in terms of health tomorrow. We urge your administration to have confidence in the potential of America’s biomass-based diesel producers to replace Russian oil with homegrown, renewable, low-carbon fuel,” the letter concludes.

The letter notes that in 2020, during the pandemic and associated shortfalls in fuel refining, the clean fuels industry contributed more than 3 billion gallons of biodiesel and renewable to maintain fuel supplies and keep essential goods moving. According to data from the World Agricultural Economic and Environmental Services (WAEES), the additional supply of clean fuel that year kept diesel fuel prices $0.24 per gallon lower than they would have been otherwise.

Kurt Kovarik, Clean Fuels’ Vice President of Federal Affairs, adds, “The Renewable Fuel Standard was established as a cornerstone of America’s energy independence. Since homegrown biodiesel and renewable diesel are direct replacements for foreign oil, a strong RFS is more important today than ever for the nation’s national security.”

The letter requests that the administration quickly finalize the proposed RFS volumes for 2021 and 2022 and drop the proposal to “reset” previously established 2020 volumes.

The U.S. biodiesel and renewable diesel industry supports 65,000 U.S. jobs and more than $17 billion in economic activity each year. Every 100 million gallons of production supports 3,200 jobs and $780 million in economic opportunity. Biodiesel production supports approximately 13 percent of the value of each U.S. bushel of soybeans.

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