American Coalition for Ethanol (ACE) CEO Brian Jennings issued the following statement after today’s announcement from the U.S. Environmental Protection Agency (EPA) regarding the backlog of nearly 200 small refinery exemptions (SREs) under the Renewable Fuel Standard (RFS):
“EPA appears to be carefully trying to balance the recent caselaw and the RFS statute when it comes to their new methodology for small refinery exemptions. The good news is that EPA is proposing to reallocate any and all small refinery exemptions they grant for 2023 and beyond, which is how the SRE program should be implemented. EPA will issue a supplemental proposal on how they intend to reallocate exempted gallons for 2023 and beyond, and their reallocation methodology will be incorporated into the final ‘Set 2’ rule later this year which also covers the 2026 and 2027 renewable volume obligations.
“The Agency argues they’re not going to reallocate for exempted gallons granted to small refineries for the 2016 through 2022 RFS compliance years because those RINs are expired and it will not have an impact on blending. That may be true, and we will carefully monitor how the D6 RIN market reacts to this news. In the past, SREs led to depressed RIN values which discourages blending of E15 and higher blends. Overall, however, the approach proposed by EPA looks reasonable.”