EPA Grants RFS Small-Refinery Exemptions

LINCOLN, Neb. (DTN) -- The Trump administration granted two full small-refinery exemptions, 50% exemptions on 12 petitions and denied two other petitions for compliance years 2021 to 2024, the U.S. Environmental Protection Agency said in a Renewable Fuel Standard announcement on Friday.

The announcement comes as the agency also considers public comments made on a proposal to reallocate biofuels gallons lost on 140 partial and full exemptions granted by the administration recently.

"With most of the old petitions now cleared, EPA is committed to working with DOE (U.S. Department of Energy) to address new petitions as quickly as possible and within the 90-day statutory review period, ... " the EPA said in a news release.

"Furthermore, on Sept. 16, 2025, the agency announced a supplemental notice of proposed rulemaking that takes into consideration the expected impacts of the Aug. 22, 2025, SRE decisions. EPA is reviewing comments on the supplemental proposed rule as the agency continues to work on final regulations for the 'Set 2' rule. As stated in the (supplemental proposal), EPA intends to update the agency's projections of exempted gasoline and diesel volumes in the final rule based on any additional SREs issued after the proposal, including the petition decisions in this action."

EPA said announcement was part of the Trump EPA's "commitment to get the RFS 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.

"EPA is reaffirming the agency's policy of returning RFS compliance credits, known as renewable identification numbers, previously retired for compliance when a small refinery receives an exemption for a prior compliance year," the agency said.

Geoff Cooper, president and CEO of the Renewable Fuels Association, said in a statement he questions EPA's decision.

"Today, EPA created even more uncertainty and confusion in the renewable fuel and agriculture markets, which are already under immense pressure from record corn and soybean harvests this fall," Cooper said.

"EPA added another 14 small-refinery exemptions to the already-massive pile today, based on the agency's questionable new approach to determining whether those refiners experienced 'disproportionate economic hardship.'"

Cooper said the RFA continues to dispute the notion that SREs are "warranted at all" since the agency's own analysis shows that all refiners -- large and small -- face a proportional RFS compliance obligation and pass their RIN costs through to buyers of their refined products.

"The silver lining here is that EPA is returning expired RINs to the six refineries who were granted exemptions from their 2021 and 2022 RFS obligations," Cooper said.

"However, more than 500 million valid RINs will be issued to eight refineries who were gifted exemptions from their 2023 and 2024 obligations, meaning there are now more than 2.5 billion RINs associated with 2023-2025 SREs that are likely to be dropped back onto the market in the months ahead."

Cooper said if EPA decides not to reallocate those volumes when it finalizes the 2026 and 2027 RFS volumes, the "impact on biofuel and agriculture markets will be devastating."

He said EPA's decision further underscores the "crucial need" for EPA to finalize 2026-2027 renewable volume obligations that fully reallocate any and all SREs granted, or expected to be granted, for the 2023-2027 compliance years.

Read more on DTN:

"Ethanol Blog: Forty-Two Members of Congress Urge EPA to Minimize RFS Volumes Increases, Stop Reallocation Plans," https://www.dtnpf.com/…

"EPA Proposes RFS Reallocation Options," https://www.dtnpf.com/…

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

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