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Ag, biofuel groups focus on reallocation after EPA grants refinery exemptions

Ag and biofuel groups say they’re cautiously optimistic about the U.S. EPA’s Small Refinery Exemption decision, despite the agency granting more relief than initially projected.

Dave Walton, vice president of the American Soybean Association and Iowa farmer, says the situation turned out better than expected.

“Anything above the baseline of 990 million RINs, they’re gonna reallocate 100 percent of those RINs back into the marketplace during the compliance years of 2026 and 2027,” he says. “What that means is there’ll be no loss of biofuel demand, you know, it will basically be made whole again.”

The EPA says it is exempting 1.76 billion Renewable Identification Numbers (RINs) worth of Renewable Fuel Standard compliance obligations for 29 small refineries.

Dawn Caldwell with Renewable Fuels Nebraska tells Brownfield it’s difficult to accept the argument that some refiners are facing economic hardship.

“Some of those refiners, my goodness, they made more money than all of farming put together and that’s considered hard,” says Caldwell. “So it’s difficult for us to see. We’ll manage through it and we’ll continue grinding along to create that more robust market.”

Kurt Kovarik with Clean Fuels Alliance America says the additional exemptions are disappointing, and he hopes the decision doesn’t reverse progress or undermine the industry’s confidence in the Renewable Fuel Standard.

Walton says a rulemaking is likely going to be required to return the gallons to the marketplace, and ASA is watching closely to ensure the EPA follows through.

“I think the pressure is on EPA to follow through with this, and actually make sure they reallocate all of the additional RINs back into the marketplace,” says Walton.

The American Petroleum Institute is critical of the EPA’s decision. In a letter to the EPA on Monday and a statement to Brownfield, API said widespread refinery exemptions and reallocation distort the fuels market, creating uncertainty and an uneven playing field for refiners that didn’t receive waivers.

Biofuel groups, including Growth Energy and the Renewable Fuels Association, also say they’ll work with the EPA to account for the lost biofuel gallons.

Hear Brownfield’s interview with Dave Walton.

Hear Brownfield’s interview with Dawn Caldwell.