Biofuels Group Targets EPA Waivers

LINCOLN, Neb. (DTN) -- The Renewable Fuels Association filed two legal challenges to the Trump administration's granting of small-refinery exemptions to the Renewable Fuel Standard, three weeks after the U.S. Environmental Protection Agency granted exemptions on Aug. 31, 2026, totaling 1.76 billion gallons.

The RFA petitioned the U.S. Court of Appeals for the District of Columbia Circuit asking for review of that decision, as well as another decision on six other SRE petitions announced on Aug. 3, 2026.

In all, more than 30 petitions for review have been filed by a variety of interests with the D.C. Circuit on the EPA's handling of the exemption petitions, focused primarily on the same legal arguments against the actions.

The EPA announced at the end of August plans to issue a rulemaking to reallocate all gallons waived as part of the Aug. 31, 2026, announcement.

Such a proposal has yet to be put forward by the EPA.

RFA President and CEO Geoff Cooper said in a statement to DTN his group will press EPA on its decisions.

"These exemptions are unjustified and based on flawed analysis by the Department of Energy," Cooper said.

"We intend to challenge these decisions vigorously. EPA's own analyses show that RIN compliance costs are passed through to wholesale fuel buyers, meaning small refineries are not bearing a disproportionate burden. Congress never intended the SRE program to be a permanent entitlement for highly profitable oil refining companies."

The EPA, however, made a change in policy when it comes to cost passthrough.

The agency spent years arguing that refiners generally recover the cost of buying renewable identification numbers, or RINs, through fuel prices. The EPA still maintains that its analysis of the markets supports that passthrough nationally.

After a key 2024 decision in the DC Circuit on Sinclair IV v. EPA, the agency says it was no longer assuming every refinery fully passes through RIN costs, when evaluating hardship petitions.

EPA now says a refinery can experience "partial" disproportionate economic hardship, meaning refineries can receive full or partial exemptions, or denials on their SRE petitions. The EPA also uses a Department of Energy matrix that includes several different factors including refiner access to capital and credit, refining margins compared to industry averages, renewable fuel blending capacity, and other factors.

Essentially, the EPA has moved away from blanket denials of petitions and toward a case-by-case system to make that decision.

EPA granted exemptions for 2023 and 2024 totaling 160 million RINs, and then 29 more SREs totaling 1.76 billion gallons at the end of August -- the second-highest exempted volume in the history of the RFS.

The Renewable Fuels Association filed two previous rounds of SRE challenges after the EPA granted petitions in 2025.

Briefing in those consolidated cases is underway and involves the same core legal issues, including EPA's methodology for evaluating disproportionate economic hardship under the Clean Air Act.

"The D.C. Circuit is already considering these same legal questions in the case regarding SREs granted in late 2025," Cooper said. "Our new filing ensures the August 2026 exemptions are properly preserved for judicial review while allowing the court to resolve the fundamental legal issues first."

Read more on DTN:

"EPA Exempts 1.76B RIN Gallons in 2025," https://www.dtnpf.com/…

"Trump Grants Full SREs on 63 Petitions," https://www.dtnpf.com/…

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

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