16/07/25
US refiners lobby to revive expired biofuel credits
New York, 16 July (Argus) — A group of small oil refiners asked US officials at
a recent meeting to not just grant exemptions from years-old biofuel blend
mandates but to also provide lucrative program credits they can sell to other
companies. The Environmental Protection Agency (EPA) has proposed record-high
biofuel blend mandates for the next two years, but farm groups fear that a
backlog of exemption requests threaten those targets. There are more than 180
unresolved exemption requests stretching over 10 years after courts struck down
various denials during former-president Joe Biden's term. Under the Renewable
Fuel Standard, oil refiners and importers must annually blend biofuels or buy
Renewable Identification Number (RIN) credits from those that do. But refiners
that process 75,000 b/d or less of crude and can prove "disproportionate
economic hardship" are able to request full exemptions which can mean tens of
millions of dollars in reduced compliance costs. In a 20 May meeting with EPA
officials, a coalition of small refiners made the case that President Donald
Trump's administration should not just grant broad relief from 2019-2022
mandates but also issue "replacement RINs" for any refiners that already
complied. EPA should issue these RINs "with adequate lead time" before
compliance deadlines and ensure they have "adequate shelf life", according to a
proposal shared with EPA by a coalition lawyer and obtained by Argus through a
Freedom of Information Act request. The agency should even consider giving
companies more credits than they submitted if RINs are cheaper now, the group
argued. RINs from those years are otherwise expired and would be useless if
returned as is. "Hardship relief is more critical now than ever", the group of
14 companies argues, given rising biofuel quotas. The issue is politically
tricky for EPA, since widespread waivers threaten biofuel and crop demand, and
has been the subject of numerous court fights over the years. The first Trump
administration handed out exemptions generously , but current officials have not
yet staked out a clear position. EPA told Argus it is taking steps "to reduce
the backlog as soon as possible". Living RIN the past EPA could potentially
return credits on a staggered timeline or impose conditions on their use to
avert market turmoil, according to lawyers and lobbyists experienced in waiver
issues. The proposal alludes to this, noting however that "any conditions on RIN
return that are intended to address potential market reactions must strike the
appropriate balance to ensure flexibility to small refineries". Biofuel groups
have lobbied against retroactive waivers but said that EPA could minimize the
damage by making other oil companies blend more biofuels. The agency should
ensure that any exemptions "will be made up in the market", said Emily Skor,
president of ethanol lobby Growth Energy, at a hearing last week. But the
refiners' proposal argues that EPA is not required to do so if it grants
exemptions retroactively. The agency has estimated future exemptions when
calculating the percentage of biofuels individual refiners must blend —
frustrating large producers that then shoulder more of the burden of meeting
high-level targets — but doing the same with past-year waivers is more legally
risky. The small refiners float a less aggressive approach for other compliance
years. The proposal notably makes no reference to petitions for relief from
2016-2018 quotas. EPA under Biden rejected 31 petitions for those years but did
not require companies to surrender additional RINs, potentially making any push
for extra relief a tougher sell despite courts' skepticism of the underlying
denials. And for 2023 and beyond, the refiners say that EPA should rely on
"merit-driven scoring". EPA already consults with the Department of Energy,
which scores hardship for individual applicants, though the importance of this
feedback has varied over the program's history. The coalition also wants EPA to
rescind three 2023 compliance year denials issued during the final days of
Biden's term, which affected two Calumet refineries and one CVR Energy refinery.
RINto the future The coalition's proposal is notable since small refiners —
apart from a handful recently calling for a "seat at the table" — have largely
not publicized their asks of the Trump administration, leading traders to
speculate wildly on policy shifts. RIN prices have been volatile as a result.
The coalition includes 14 companies that submitted 41 petitions that courts have
told EPA to reconsider as well as 37 requests for more recent years, the
proposal says. They are represented by independent attorney Claudia O'Brien, who
did not respond to a request for comment. The documents obtained by Argus do not
list all companies involved in the effort, but lawyers for Calumet, Par Pacific
and Placid Refining were scheduled to attend the May meeting in person with top
EPA appointees Aaron Szabo and Alexander Dominguez, while others attended
virtually. O'Brien said in a separate email that Hunt Refining, REH Company, and
Ergon were part of the coalition. The policy requests represent the position of
one group and not necessarily all 34 refineries EPA estimates are eligible for
future waivers. It is not clear how officials responded at the meeting or what
options they are weighing now. EPA wants to finalize new blend mandates before
November and has said it plans to communicate its approach to exemptions
beforehand. By Cole Martin Send comments and request more information at
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