EPA Approved Refinery Waivers Raise Ire of Biofuels Industry

07:15PM Mar 19, 2019
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Last week in Washington, the Environmental Protection Agency announced approval of five more small refinery exemptions. The exemption requests date back to 2017.

Ethanol supporters say the waivers pull 366 million gallons of biofuel out of Renewable Fuel Standard (RFS) compliance. 

"If a small refinery wants to try to take advantage of the refinery exemption they have to apply to the Department of Energy (DOE) and it reviews the financial information for the refinery," said newly-confirmed EPA Administrator Andrew Wheeler. "They have to first show that it is a small refinery and second that the program creates an economic hardship."

Wheeler says EPA then has to take the recommendations of the DOE, review and make a determination about whether to grant or deny a small refinery exemption. 

"The small refinery exemption program was not implemented for the first few years of the program and the agency was actually sued three times for failure to implement the program," said Wheeler. "We lost all three times."

He says EPA is following the court decisions that direct the agency to have the program.

"It is an important program because there are some small refineries located in and around the country particularly in the Rocky Mountain states where they have very small financial margins and a program like [RFS] can create problems," said Wheeler. "If you put a small refinery out of business in an isolated community that can create havoc for the communities that depend on the fuel from those refineries."

For the 2016 and 2017 years, the EPA has approved more than 50 waivers impacting over 2.6 billion gallons of ethanol.

The National Corn Growers Association says in years prior to 2016, before former EPA Administrator Scott Pruitt took the reins, those Small Refinery Exemptions totaled less than 300 million gallons per year.

The renewable fuels industry says the increase is a direct cut to ethanol demand and undermines the RFS. 

"We're trying to make sure that we keep as close to the 15 billion gallon [RFS mandate] as we can," says Wheeler "We're providing more transparency on the small refinery exemptions."

EPA put a dashboard on its website last fall that shows the latest information.

"We're publishing the information so that people know exactly what we're doing and why we're doing it," says Wheeler. "We're following the law."

Currently, EPA has two remaining refinery exemption petitions for 2017. Refineries have also submitted nearly 40 petitions for 2018 exemptions.

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