EPA grants small refinery exemptions

WASHINGTON — The U.S. Environmental Protection Agency granted 29 small refinery exemptions from 2025 Renewable Fuel Standard blending requirements and included a proposed plan to restore the lost renewable fuel volume in the near future.

Of the 34 pending exemption petitions, EPA granted full exemptions to 18 and partial, or 50%, exemptions to 11. It also denied three petitions and determined two petitions to be ineligible.

This represents a total of 1.76 billion exempted Renewable Identification Numbers, or renewable fuel blending credits.

EPA simultaneously announced a proposal to reallocate 100% of the newly exempted renewable fuel volume into the 2026 and 2027 renewable volume obligations before the end of October 2026. This will allow the market to appropriately account for the additional RINs.

In consultation with U.S. Department of Energy, EPA reviewed and considered information submitted by each petitioning small refinery. EPA then evaluated each SRE petition consistent with the Clean Air Act and case law.

In 2020, EPA established a methodology in regulation for predicting the expected volumes that would be exempted based on an average of the past three years.

Before that rule-making, SREs were not considered as part of the volumes — in other words, all SREs had the result of reducing volumes.

Following EPA’s methodology, the agency estimated that 990 million RINs would be exempted in 2025 in “Set 2” and put into the volumes.

However, due to more small refineries requesting exemptions and changes in financial circumstances, EPA is exempting more RINs than estimated in “Set 2.”

“Based on agency experiences, DOE is evaluating how it has historically utilized their 2011 disproportionate economic harm methodology and the information needed for future small refinery petitions to account for current market circumstances in this new phase of the RFS program. DOE will continue to seek public feedback from all impacted stakeholders on these analyses,” EPA noted in a release.

SRE Criteria

The Renewable Fuel Standard allows qualifying small refineries to seek an extension of the program’s original exemption when they can demonstrate disproportionate economic hardship.

An SRE allows certain small oil refineries to temporarily avoid part of all of the federal requirements to use renewable fuels, including ethanol and biodiesel.

“When exempted obligations are not reassigned to other refiners, the overall renewable fuel requirement effectively shrinks, reducing demand for RINs and weakening the incentive to blend renewable fuels,” Faith Parum, American Farm Bureau Federation economist, recently noted in Farm Bureau Intel.

“For farmers, un-reallocated exemptions mean weaker demand for agricultural products, particularly corn used for ethanol and soybean oil used for biomass-based diesel.”

Refineries

The EPA’s SRE ruling included the following refineries that received full or partial exemptions, as well as those with their requests denied:

• Alon Refining Krotz Springs — full grant.

• Alon USA — full.

• American Refining Group — denied.

• Big West Oil — partial grant.

• Calumet Montana Refining — full.

• Calumet Shreveport Refining — full.

• Chevron Salt Lake — full.

• CHS Laurel Refinery — full.

• Countrymark Refining and Logistics — full.

• Delek Refining — full.

• Ergon Refining — partial.

• Ergon-West Virginia — denied.

• HF Sinclair Artesia Refining — ineligible.

• HF Sinclair Casper Refining — partial.

• HF Sinclair Parco Refining — partial.

• HF Sinclair Tulsa East Refining — full.

• HF Sinclair Woods Cross Refining — denied.

• Hunt Refining Company — full.

• Kern Oil & Refining Company — full.

• Lion Oil Company — full.

• Marathon Mandan — partial.

• Par Montana Refining — full.

• Phillips 66 Montana — partial.

• Placid Refining Company — partial.

• San Joaquin Refining Company — partial.

• Silver Eagle Evanston — full.

• Silver Eagle Woods Cross — partial.

• Superior Refining Company — full.

• The San Antonio Refinery — full.

• U.S. Oil & Refining Company — partial.

• United Refining Company — full.

• Vertex Energy — ineligible.

• Wynnewood Refining Company — full.

• Wyoming Refining Company — partial.