EPA grants more RFS waivers, undercuts add’l demand for biodiesel

U.S. EPA retroactively granted five new small refinery exemptions for 2017, releasing them from their obligations under the Renewable Fuel Standard. The five new small refinery exemptions reduced the 2017 renewable volume obligation (RVO) for biomass-based diesel by an additional 48 million gallons.

Previously granted exemptions had reduced the 2017 RVO by 192 million gallons. EPA’s small refinery exemptions for 2015, 2016 and 2017 have now reduced biomass-based diesel demand by more than 360 million gallons.

“EPA Administrator Andrew Wheeler is unfortunately following in the footsteps of Scott Pruitt, undercutting demand for biodiesel and renewable diesel by handing out retroactive small refinery exemptions to every refinery that asks for one,” said Kurt Kovarik, vice president of federal affairs for the National Biodiesel Board. “It appears to be business-as-usual at EPA, with no effort to ensure that renewable volume obligations are made whole following the exemptions. America’s farmers, biofuel producers and the environment are directly harmed.”

The RFS allows small refineries with a throughput of less than 75,000 barrels per day to petition EPA for a temporary exemption from their RVO requirements for a given year, provided they can demonstrate compliance would impose a “disproportionate economic impact” on them. EPA’s waiver-granting process is shrouded in secrecy, however, as the agency has yet to provide any information regarding how it assesses petitions. In 2018, a lawsuit was filed against EPA on its misuse of the exemption process. 

“EPA’s decision to grant five more small refinery exemptions is a slap in the face to rural communities, where farmers have lost a key market for their crops and biofuel plants have shut down or idled production,” said Emily Skor, CEO of the ethanol trade group Growth Energy. “EPA continues to hand out exemptions to unidentified refiners, which only strengthens our serious concern that EPA continues to enrich some of the most profitable oil refineries in the world, all in secret. Now more than ever, EPA must restore the 2.6 billion gallons of biofuel lost to these small refinery exemptions and ensure that the targets set by EPA are met in earnest, and we will continue to fight tooth and nail to see that happen.”

Kovarik pointed out that the 2017 volumes for biomass-based diesel were set at 2 billion gallons, well below the biodiesel industry’s capacity to produce. “Now, the retroactive small refinery exemptions for 2017 have cut the obligation by a total of 240 million gallons, or 12 percent,” he said. “Because they’re retroactive exemptions, the reduced demand for biomass-based diesel will hit our industry throughout 2019. This is just another action by EPA to put big oil interests over America’s soy farmers and biodiesel producers.”