EPA issues last-minute approval of 3 SREs

The U.S. EPA late on Jan. 19 published updated small refinery exemption (SRE) data showing that the agency has approved three new SRE petitions, one for Renewable Fuel Standard compliance year 2018 and two for compliance year 2019. The newly updated data also shows one additional SRE petition has been filed for compliance year 2020.

The one additional SRE petition approved for compliance year 2018 accounts for approximately 110 million renewable identification numbers (RINs), or approximately 1 billion gallons of gasoline and diesel that will be exempt from RFS blending obligations. The status of that petition appears to have been changed from “denied” as of Dec. 17 to “approved” as of Jan. 19 as the total number of SRE petitions filed for compliance year 2018 held steady at 44 and the number of petitions declared ineligible, the number of petitions withdrawn, and the number petitions pending also held steady at two, three and three, respectively.

On a combined basis, the two SRE petitions approved for compliance year 2019 account for approximately 150 million RINs, or 1.39 billion gallons of gasoline and diesel that will be exempt from RFS blending obligations.

As of Jan. 19, 65 SRE petitions are currently pending, including two for compliance year 2011, two for compliance year 2012, three for compliance year 2013, four for compliance year 2014, three for compliance year 2015, two for compliance year 2016, one for compliance year 2017, three for compliance year 2018, 30 for compliance year 2019, and 15 for compliance year 2020.

The National Biodiesel Board has condemned the EPA’s approval of the three SREs. "EPA's last-minute gifts to oil refiners come at the direct expense of biodiesel and renewable diesel producers,” said Kurt Kovarik, vice president for federal affairs at the NBB. “This disappointing action further undermines the integrity of the Renewable Fuel Standard program by destroying demand for additional gallons of biofuel."

The Renewable Fuels Association vowed to fight EPA’s approval of illegal, last-minute refinery exemptions. “This midnight-hour attempt by the Trump administration to damage the Renewable Fuel Standard and sabotage the ethanol industry’s recovery from the COVID pandemic simply cannot be allowed to prevail,” said Geoff Cooper, president and CEO of the RFA. “With just hours remaining in his shameful term as EPA Administrator, Andrew Wheeler couldn’t stop himself from doling out a few more Clean Air Act compliance exemptions to his well-connected friends. But the fact remains that today’s action by EPA is completely without legal merit. It flouts both the statute and recent court decisions that clearly limit EPA’s authority and ability to grant these exemptions. And while this action comes as one last sucker punch from the Trump administration, we are confident it will be a hollow victory for the politically connected oil companies receiving today’s waivers, as the new Biden Administration will most certainly act quickly to restore the volumes erased by these waivers.”

The RFA noted that the waivers come less than two weeks after the U.S. Supreme Court announced it will review the Tenth Circuit Court’s decision in RFA et al. v. EPA, which found EPA had grossly exceeded its statutory authority in granting three exemptions. Previously, Wheeler had claimed EPA would not decide any pending waiver petitions until any and all appeals of the Tenth Circuit decision were resolved.

“In the past, Administrator Wheeler has asserted that the ‘appeals process needs to play out’ before EPA will decide the SRE petitions,” Cooper said. “Unfortunately, hypocrisy has been the hallmark of the Trump administration’s EPA, which right to the end has demonstrated its fealty to the nation’s largest polluters, while showing nothing but disdain for America’s hard-working farmers and producers of homegrown renewable fuels. Today’s action by Wheeler and his political enablers will not be forgotten by the women and men across the Heartland whose livelihoods depend on a strong renewable fuels industry and stability and certainty in the RFS policy.”

Growth Energy is calling on the incoming Biden administration to reverse the harm done to rural America through SRE abuse. “Farm families and biofuel workers across the country have worked tirelessly to make a living over the past few months despite a global pandemic,” said Emily Skor, CEO of Growth Energy. “And yet, the Trump Administration’s SRE abuse has piled on to the uncertainty and difficulty that rural Americans are facing every day. Given President-elect Biden’s commitments on the campaign trail, we‘re confident his incoming team will swiftly work to reverse the damage these oil handouts have done to rural America by this midnight maneuvering.”