EPA grants more 2016 exemptions for RFS

Federal regulators have approved 19 waivers for small refineries from 2016 obligations under the Renewable Fuel Standard (RFS), the Environmental Protection Agency (EPA) confirmed to Argus.

That was five more than the 14 confirmed in early April for small refineries from the fuel blending obligations for the 2016 compliance year. The number of waivers approved for 2017 was unchanged from a month ago, at 25, according to the agency.

EPA's use of the waivers has roiled biofuel and agriculture advocates and helped to push down compliance costs associated with the program.

RFS requires refiners, importers and other companies to each year ensure minimum volumes of renewables blend into the gasoline and diesel they add to the US transportation supply. Companies prove compliance by acquiring renewable identification numbers (RINs) associated with each blended gallon of the fuel. Obligated parties that do not blend fuel purchase RINs from others.

Individual refineries processing no more than 75,000 b/d of crude may receive hardship waivers under the program. President Donald Trump's administration has been far more willing to grant such exemptions following a court ruling last fall that the EPA had overstepped its authority in setting more strict criteria.

EPA does not transfer the small refinery obligations over to larger peers. The waivers instead reduce RIN prices by increasing the supply of available credits while slashing the number of refiners needing them. The agency has not updated how many RINs are associated with the 2016 and 2017 waivers. EPA last fall attributed 515mn RINs to the 2016 waivers granted at the time.