The U.S. Environmental Protection Agency announced decisions on 34 small refinery exemption petitions under the Renewable Fuel Standard for 2025, exempting approximately 1.76 billion Renewable Identification Numbers from compliance requirements for 29 small refineries.
The agency said it will propose reallocating 100% of the difference between projected and actual exempted volumes for 2025 into the 2026 and 2027 Renewable Volume Obligations before the end of October.
Exemption Decisions
EPA, in consultation with the U.S. Department of Energy, reviewed information submitted by each petitioning refinery and evaluated the requests under the Clean Air Act and applicable case law.
Eighteen refineries received full exemptions, 11 received 50% exemptions, three were denied and two were deemed ineligible.
EPA also plans to issue a direct final rule extending the 2025 RVO compliance date by 30 days to Oct. 1, 2026, allowing the market additional time to account for the exempted RINs.
The agency said the number of exempted RINs was higher than anticipated under its existing methodology. EPA established that methodology in 2020, using an average of the previous three years to estimate expected SRE volumes. Under the approach, EPA had estimated that 990 million RINs would be exempted in 2025 under its Set 2 rule and incorporated into the applicable volumes.
More small refineries requested exemptions, while changes in their financial circumstances also contributed to the higher-than-expected exemption volume.
Soybean Industry Response
The American Soybean Association said the planned 100% reallocation should prevent the SRE decisions from reducing biofuel demand. Without the full reallocation, ASA estimated biomass-based diesel demand could decline by 500 million gallons and soybean farmers could lose nearly $1 billion in revenue.
ASA credited President Donald Trump, USDA officials and members of Congress with highlighting the potential impact of the exemptions on biofuel feedstock producers and working toward measures to protect domestic soybean markets.
“Soybean farmers greatly appreciate President Trump, Senator Grassley along with other biofuel champions in Congress, and USDA officials for sounding the alarm and working around the clock to ensure that soybean farmers and producers of homegrown biofuels are not negatively impacted by today’s SRE announcement,” said Dave Walton, ASA vice president and an Iowa soybean farmer. “We appreciate the administration’s commitment to reallocating 100% of these additional exemptions and their intention to enter into supplemental rulemaking soon, but timing is critical. Any delay in reallocation risks undermining the domestic market demand that soybean farmers urgently need as we enter harvest season. EPA must move quickly to fully reallocate these RINs and ensure soybean farmers are held harmless.”
ASA also urged EPA to include 100% reallocation of updated expected SRE levels for 2026 and 2027. The association said EPA had accounted for expected exemptions when establishing those volumes, but higher-than-anticipated SRE levels could require further adjustments if the assessment methodology remains unchanged.
ASA said addressing the 2025-27 SRE volumes together could protect the RFS and reduce the need for annual supplemental rulemakings.
DOE Review and RIN Market Concerns
DOE is evaluating how it has historically applied its 2011 disproportionate economic harm methodology and what information should be required in future SRE petitions to account for current market conditions. The agency will continue seeking public feedback from stakeholders on its analyses.
EPA also raised concerns about inaccurate and misleading reporting surrounding its RFS actions, saying such reports have contributed to significant market movements despite the absence of official agency or administration action.
The agency said recent reports and information contributed to volatility in the RIN market and raised concerns about potential misuse of material nonpublic information and market manipulation. EPA said it is working with the Commodity Futures Trading Commission and plans to expand that coordination to ensure compliance with federal law and protect the integrity of the RIN market.
Sources:
United States Environmental Protection Agency, "EPA Announces Action on 2025 Small Refinery Exemptions and Related Actions"
American Soybean Association, "ASA Statement on Small Refinery Exemptions & RIN Reallocation"