Refiners add to biofuel waiver requests

US refiners added five requests for exemptions of 2020 renewable fuel blending requirements and one to exempt 2019 requirements over the past month, according to the Environmental Protection Agency.

EPA today reported nine pending applications to waive Renewable Fuel Standard (RFS) requirements for 2020 and 32 pending applications to waive 2019 requirements. The agency took no action on any pending requests.

RFS requires refiners, importers and certain other companies each year ensure that minimum volumes of renewables blend into the gasoline and diesel they add to the US transportation fuel supply. Obligated companies prove compliance by acquiring renewable identification numbers (RINs) representing each blended ethanol-equivalent gallon of fuel.

The law includes exemptions for refineries processing fewer than 75,000 b/d of crude a year and able to persuade Energy department and EPA regulators that the mandates create a hardship. Such exemptions were rare until President Donald Trump's administration, which approved nearly three dozen waivers in 2017. Because the exemptions do not shift blending obligations to other, larger refineries, they effectively reduce total blending requirements for a given year. Exemptions effectively reduced 2017 obligations by about 10pc.

EPA administrator Andrew Wheeler has said that the agency would not act on waiver requests for compliance years since 2019 until court challenges to prior decisions are settled. The US Supreme Court will consider an appeal of a 10th Circuit decision from January that EPA was too generous with the waivers, setting criteria that allow waivers to just two refineries.

Other court challenges continue. Small refiner Ergon Refining was at the center of a key 2018 decision that EPA was too strict with waivers for the 2011 to 2018 compliance years. The refiner won another appeal this week finding that EPA was again too strict with its criteria in denying an Ergon waiver application. California small refiner Kern Oil separately appealed an EPA rejection of its requests to waive requirements for prior years so that the refinery could maintain its eligibility under the new 10th Circuit requirements.

By Elliott Blackburn