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 Welcomes RFS Volumes for 2021 and 2022

Jun 4, 2022, 11:33 AM
Volumes establish a jumping off point for growth in 2023 and beyond

June 3, 2022

WASHINGTON, DC- Today, Clean Fuels Alliance America welcomed the Environmental Protection Agency’s final rule for the 2021 and 2022 Renewable Fuel Standard volumes. The final rule recognizes the continued growth of biodiesel, renewable diesel and other clean fuels and establishes readily achievable program obligations. Clean Fuels supports EPA’s decision to deny pending small refinery exemptions and its consistent finding that the program benefits Americans without hardships for refiners.

“Clean Fuels and its members appreciate EPA Administrator Regan’s recognition that homegrown, clean fuels offer a better solution to high fuel prices stemming from high oil prices and supply shortages,” said Kurt Kovarik, vice president of federal affairs for Clean Fuels. “We support EPA’s efforts to get the Renewable Fuel Standard back on track and to finalize 2022 volumes as a jumping off point for future growth. We stand ready to work with the agency to move forward and set volumes for 2023 and beyond. And we encourage the agency to quickly finalize new feedstocks pathways, such as that for canola oil.”

“Biodiesel and renewable diesel are essential to keeping the U.S. economy moving right now, meeting more than 5 percent of the nation’s need for heavy duty transportation and shipping fuel. The clean fuels industry increased production and supply even during the economic emergency of the last few years, helping Americans save 4% on the cost of diesel fuel and all the other consumer items that rely on diesel fuel for shipping,” Kovarik added.

A recent study from the World Agricultural Economic and Environmental Service shows that U.S. biodiesel and renewable diesel production generates a 4 percent decrease in the price of diesel fuel. The WAEES study is available for download on cleanfuels.org.

Kovarik continued, “EPA’s denial of pending small refinery exemptions for 2019 through 2021 assures our industry that the volumes set today will be fully met, even with compliance flexibilities. This is an important first step in restoring integrity to the program.”

Today’s rule meets EPA’s consent decree with the U.S. Court of Appeals for the D.C. Circuit to finalize the 2021 and 2022 rules. EPA is currently taking comment on a proposed consent decree to finalize the 2023 RFS volumes and standards by April 2023.

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.

Contact: Paul Winters, 202-737-8803, pwinters@cleanfuels.org

      

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