Each year, EPA sets a renewable fuel standard (RFS) that requires gas and diesel be blended with a minimum volume of renewable fuels. Small fuel refiners can petition the EPA to be exempt from fulfilling the RFS obligations due to “disproportionate economic hardship,” according to EPA.
EPA announced Friday that the agency has moved to deny exemption petitions from 26 small refineries for compliance years 2016 to 2023.
Here’s what ethanol stakeholders had to say about EPA’s decision:
“We appreciate the EPA standing by its commitment to protect the integrity of the RFS. Nearly two decades of data prove that the supposed ‘cost’ to refiners is an accounting fiction, and EPA’s decision reflects those facts,” said Emily Skor, Growth Energy CEO.
“The RFS is finally working as intended to drive increased production and use of low-carbon renewable fuels. Today’s action is consistent with the Tenth Circuit Court’s landmark decision and honors the RFS in a way that is fair, transparent, and focused on growth,” said Geoff Cooper, Renewable Fuels Association president and CEO.
EPA’s Small Refinery Exemption Track Record
The decision follows a study from the U.S. Government Accountability Office (GAO) released in November 2022, which found small refineries experience the economic hardship necessary to meet the exemption, and that EPA’s continued decision to deny all exemption petitions is inaccurate.
GAO then recommended EPA take up a new exemption assessment process that includes:
1. Reassess its conclusion that all small refineries recover the cost to meet each year’s blending obligations.
2. Develop new policies and procedures for making exemption decisions.
3. Construct a new approach to better meet its annual March deadline.
However, the GAO said EPA made it clear, after reading the study results, that “it does not intend to revisit its 2022 exemption decision.” This looks to be the case as it denied all requests again this year.
