The US Environmental Protection Agency (EPA) granted exemptions from 2025 biofuel blending requirements to 18 refiners on Monday and partial exemptions to 11 others, many of which had been pending for more than a year.
The agency exempted a total of 1.76bn credits by granting 18 full small refinery exemptions (SREs) and 11 partial exemptions. It denied three petitions and ruled two ineligible. In a supplemental document, the EPA said it would propose reallocating 100pc of the difference between projected and actual exempted volumes from the petitions that were fully or partially granted.
Prior to deciding on the 2025 compliance year SREs, EPA estimated 990mn RINs would be exempted.
SREs are a form of temporary exemption from Renewable Fuel Standard obligations for petroleum-based refineries with a nameplate capacity of 75,000 b/d or less. To receive a partial or full SRE, refiners must demonstrate that compliance would cause disproportionate economic hardship to qualify for an exemption.
The EPA gave notice of the action ten days prior, when it outlined its intentions to delay the 2025 compliance deadline for RFS obligations while signaling it would first clear the backlog of unprocessed SRE petitions. In the meantime, speculation within Renewable Identification Number credit markets caused sharp swings in prices and liquidity. Concerns that total SRE volumes could reach 1.8bn credits pushed prices down to 175¢/RIN for current-year ethanol D6 credits and 188.5¢/RIN for biomass-based diesel D4 credits.
RINs are credits produced and traded by refiners and importers to comply with the RFS program. Obligated parties generate credits when renewable fuels are blended into conventional transportation fuels or they can purchase credits from other RIN producers to meet their obligations.
Immediately following the announcement, biofuel and agricultural industry groups voiced overall displeasure with the substantial exemptions but welcomed the EPA's intention to reallocate 100pc of the remaining volume. RIN markets moved higher sharply as well, with current year D6 credits trading at 225¢/RIN while concurrent D4 RINs last offered at 240¢/RIN.
The EPA also set the date for 2025 RFS compliance at 1 October 2026, extending the deadline 30 days.
