The US Environmental Protection Agency (EPA) today fully or partially granted the majority of small refiners' requests for exemptions from federal biofuel blend mandates.
The agency fully accepted 63 petitions, offered 50pc relief in response to 77 petitions, denied 28 requests, and determined that 7 were ineligible. Program data shows 13 petitions still pending, mostly from the 2025 compliance year.
The Renewable Fuel Standard requires oil refiners and importers to blend biofuels into the conventional fuel supply or buy Renewable Identification Number (RIN) credits from those that do. Refiners that process no more than 75,000 b/d can request exemptions from the mandates, which they have long cast as financially onerous. President Donald Trump's administration had an unprecedented backlog of requests to decide after federal courts took issue with former president Joe Biden's reasoning for mass denials.
Many facilities have already complied with past mandates and have lobbied federal officials for retroactive compensation. EPA said Friday that only RINs from 2023 and later could be used for future compliance, meaning earlier credits are effectively worthless.
The return of pre-2023 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", the agency said.
EPA will "in the near future" submit a proposal to the White House Office of Management and Budget on how it will account for exemptions when setting future biofuel quotas. Biofuel groups have lobbied for EPA to increase obligations on large refiners to make up for small refiner exemptions that effectively curb demand for their products.
EPA does not plan to "reallocate" any exempt volumes from 2016-2022, but the proposed adjustments will account for exemptions covering the 2023 and 2024 compliance years, the agency said. EPA had already signaled that it would estimate future exemptions when setting biofuel mandates, but accounting for actual exemptions from active compliance years would be a major program shift, if implemented.
Program data shows that affected small refiners have to submit about 1.4bn fewer RINs in 2023 and 2024 following Friday's exemptions. The total mandates in those years were 20.9bn RINs and 21.5bn RINs respectively.
The agency has yet to decide any petitions for 2025, and most eligible refiners have not applied for relief.
Legal challenges on the small refinery exemptions are virtually guaranteed. The agency said that its decisions had "nationwide scope or effect" — an effort to centralize litigation at the US District of Columbia Circuit Court of Appeals rather than a hodgepodge of regional courts that might issue conflicting rulings.
