EPA Proposes Supplemental Rule on Small Refinery Exemptions

The Environmental Protection Agency has released a supplemental rule on small refinery exemptions (SREs), proposing the reallocation of volumes representing complete or partial exemptions granted for 2023 and 2024, as well as those projected for 2025. This move aims to inform the calculation of the 2026 and 2027 percentage standards. The rule will undergo a 45-day public comment period and a virtual hearing before being finalized.

Key Takeaways:

• The EPA is proposing to reallocate 100% or 50% of the SREs granted for 2023 and 2024, as well as those projected for 2025, to maintain renewable fuel demand at intended levels.
• The reallocated volumes will be added to the 2026 and 2027 RFS obligations to ensure compliance with the Renewable Fuel Standard.
• The proposal seeks comments on no reallocations at all, in addition to the proposed reallocation options.
• The Iowa Corn Growers Association (ICGA) has expressed support for the Trump Administration's support for American farmers and has urged the EPA to reallocate 100% of the 2023-2025 SREs.
• The ICGA leader, Mark Mueller, stated that farmers cannot afford to lose demand for biofuels like ethanol due to the current farm economy and projected record corn crop.
• The proposed rule will have a significant impact on the RINs market and could limit consumption of renewable fuels.

Statistics:

• 100% reallocation of SREs granted for 2023 and 2024, as well as those projected for 2025.
• 50% reallocation of SREs granted for 2023 and 2024, as well as those projected for 2025.
• A 45-day public comment period.
• A virtual public hearing planned for October 1, 2025.
• 2026: Percentage standard for renewable fuel production.
• 2027: Percentage standard for renewable fuel production.
• Projected record corn crop in 2025.

Sources:

• Iowa Corn Promotion Board/Iowa Corn Growers Association
• Environmental Protection Agency (EPA)
• Mark Mueller, Iowa Corn Growers Association President