Trump Grants Full SREs on 63 Petitions

LINCOLN, Neb. (DTN) -- The Trump administration granted full small-refinery exemptions on 63 petitions to the Renewable Fuel Standard, while granting partial exemptions on 77 petitions and denying 28 petitions, the U.S. Environmental Protection Agency announced on Friday.

In addition, the EPA announced it will be releasing a proposed rule to reallocate gallons exempted from 2023 and later years. The agency said it determined that seven SRE requests were ineligible. This means the EPA still has 57 total exemption requests pending.

"EPA does not plan to propose reallocation of any of the exempted volumes for any SREs from 2016 to 2022 in light of the limitation on their potential use," the agency said in a news release.

"EPA will also be providing updated information on how the agency intends to project SREs for 2026 and 2027 in the context of establishing percentage standards for those years. The proposed adjustments will help ensure that refineries blend the intended volumes of renewable fuel into the nation's fuel supply in 2026 and 2027 after accounting for the SREs granted for 2023 and 2024 in today's actions and projected SREs granted for 2025-2027 in Set 2."

EPA said the supplemental proposal will seek to "balance the goals of the RFS" in supporting the production and use of renewable fuels while considering "economic impacts, following the law, and ensuring opportunity for stakeholder comment."

According to the 31-page document released by the EPA on the decision, the granted full and partial exemptions account for 5.34 billion Renewable Identification Numbers, or RINs. What's more, the agency said it has moved away from presuming that all refineries can fully pass RIN costs to consumers and acknowledged that some refineries may face higher RFS compliance costs.

This is a significant change from previous assumptions made by the EPA on the RFS costs.

In addition, the EPA said it was reaffirming a policy to return RINs previously retired for compliance when a small refinery receives an exemption for a prior compliance year.

Under the RFS program, RINs have a two-year window for use, covering the compliance year in which they were generated and the following compliance year.

"Therefore, while 2022 and earlier vintage RINs are not eligible for use to meet the open 2024 compliance obligations or future obligations, these vintage RINs can be used to demonstrate compliance for prior compliance years consistent with their two-year window," the EPA said.

"Ultimately, this means that the 2022 and earlier vintage RINs will not impact the number of RINs available to meet 2024 and future compliance obligations and are not expected to impact demand for biofuels."

EPA said it also reaffirmed the policy it set in the first Trump administration in granting partial relief -- a 50% exemption -- where a small refinery has demonstrated that it faces partial hardship.

"With today's action, EPA is getting the SRE program back on track with an approach that recognizes some small refineries are impacted more significantly than others and that EPA's relief should reflect those differences," the EPA said on Friday.

The U.S. ethanol industry has expressed concern that if the SREs are not handled properly by the agency, the ethanol market could suffer.

According to the EPA's small-refinery exemption dashboard just ahead of the announcement, the 204 pending exemptions cover 2016 to 2025. That includes two pending in 2016 and one in 2017. There are 38 pending from 2018; 29 from 2019; 30 from 2020; 22 from 2021 and 2023; 19 in 2022; 30 from 2024 and 11 requested in 2025.

Todd Neeley can be reached at todd.neeley@dtn.com

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