The Environmental Protection Agency (EPA) reduces RFS obligations by hundreds of millions of gallons by granting
retroactive exemptions to oil refiners. Refiners are allowed to sell or carry forward returned RIN credits, reaping a windfall while destroying demand for biofuels in the present year.
In the 2020 RFS rule finalized in December 2019, EPA recognized its duty to ensure
the RFS volumes it sets each year are not reduced through these exemptions.
In January 2020, the U.S. Court of Appeals for the 10th Circuit ruled that EPA "opened a gaping and ever-widening hole" in the RFS program by abusing these exemptions. The court limited EPA's authority to grant exemptions only in cases where the RFS is
the direct cause of hardship.
NBB is monitoring EPA as it considers small refinery exemption petitions -- there are pending petitions for every year 2011-2020. NBB continues to pursue several legal avenues
to close the gaping hole in the RFS program caused by small refinery exemptions.
NBB works with its members to advocate to EPA to ensure RFS volumes for biodiesel and renewable diesel are made whole. NBB also asks Members of Congress to exercise oversight and ensure EPA follows the law in granting small refinery exemptions.
As our members communicate with Members of Congress, EPA and other Washington policy makers, the media, and the public, NBB works with them to amplify these points:
- Just one small refinery exemption can eliminate demand for an entire biodiesel facility. A “small” oil refinery can produce up to 3 million gallons of fuel per day. It’s annual RFS obligation for biodiesel is only 20 million gallons,
which is more than some small biodiesel plants produce in a year.
- U.S. courts consistently find that EPA fails to fully or consistently explain its small refinery exemption decisions.
- EPA began freely handing out small refinery exemptions before receiving the Congressional directives and Court decisions they currently cite as justification.
- EPA has ignored Department of Energy recommendations regarding whether
small refinery exemptions are merited.