EPA Addresses Small Refinery Exemption Backlog, Balancing Relief and Renewable Fuel Goals

The U.S. Environmental Protection Agency (EPA) has made significant progress in addressing a backlog of 175 Small Refinery Exemption (SRE) petitions spanning compliance years from 2016 to 2024. In collaboration with the U.S.

Department of Energy, the agency has granted 63 full exemptions, 77 partial exemptions, denied 28 petitions, and deemed 7 ineligible. This action is part of the EPA's reaffirmed policy established under the 2020 Renewable Volume Obligation (RVO) rule, which allows for partial reliefátypically a 50% exemptionáwhen a small refinery demonstrates partial hardship.

Devin Mogler, President and CEO of the National Oilseed Processors Association (NOPA), highlighted the importance of these measures, asserting that strong RVOs will positively impact U.S. farmers and rural communities. Mogler urged the EPA to expedite the finalization of RVOs and implement a reallocation policy that accounts for gallons lost due to SREs from 2023 to 2025, as well as to expand volumes for the biomass-based diesel category to at least 5.25 billion gallons.

Additionally, the EPA clarified the handling of Renewable Identification Numbers (RINs) associated with exemptions. RINs can only be utilized in the year they are generated or the subsequent year, which restricts the use of 2022 and earlier RINs for future obligations, thereby aiming to stabilize biofuel demand.

Looking forward, the EPA plans to submit a supplemental proposed rule to the Office of Management and Budget to address the reallocation of exempted volumes for 2023 and beyond, while maintaining the integrity of intended renewable fuel volumes.

In conclusion, the EPA's actions reflect a strategic effort to balance the relief needs of small refineries with the overarching goal of promoting sustainable growth in renewable fuels, vital for supporting rural economies and domestic markets.