Energy Marketers Urge EPA to Balance Biofuel Goals with Retail Realities in 2026-2027 RFS Proposal
Energy Marketers of America (EMA) recently submitted detailed comments to the Environmental Protection Agency (EPA) regarding its proposed Renewable Fuel Standard (RFS) for 2026 and 2027. While supportive of biofuels as a pathway to energy independence and climate progress, EMA emphasized the need for policies that account for retail infrastructure compatibility, price stability, and fuel fungibility to avoid undue burdens on small businesses and consumers.
Ethanol Mandates: Underground Storage Tank Compatibility Concerns
EMA supports the growth of renewable fuels but warned that the proposed Renewable Volume Obligations (RVOs) for ethanol could outpace the capabilities of current retail infrastructure. Many underground storage tank (UST) systems are designed for fuels with no more than 10% ethanol (E10). Components like piping, seals, and pipe dope—especially in systems installed before 2007—are often incompatible with higher ethanol blends like E15. Degradation of these components risks leaks, environmental damage, and costly repairs.
Upgrading UST systems to accommodate E15 could cost over $1 billion industry-wide, a burden small businesses cannot bear without significant financial support. EMA urged the EPA to cap ethanol RVOs at 9.7% of projected gasoline demand, as determined by the Energy Information Administration, to align with current infrastructure realities and avoid forcing retailers into unaffordable upgrades or market exit.
Stabilizing Biodiesel and Renewable Diesel Markets
EMA expressed concern over proposed changes that could destabilize the biodiesel and renewable diesel markets, already reeling from the rocky transition in the emissions-based Section 45Z Clean Fuel Production Credit. The EPA’s proposal to reduce Renewable Identification Number (RIN) credits for imported fuels and feedstocks could inflate compliance costs and RIN prices, particularly impacting regions like the Northeast and Midwest that rely on imports. EMA opposed this change and advocated for a phased approach if it must proceed, to mitigate price shocks and supply chain disruptions. Additionally, while neutral on proposed volume targets for biomass-based diesel, EMA cautioned against further market design changes that could erode investor confidence. The biofuels sector needs regulatory certainty to recover from recent production declines and for long-term growth.
Streamlining Incentives for Heating Oil
EMA highlighted inefficiencies in the RFS’s affidavit requirements for renewable heating oil, which impose significant administrative burdens on small businesses serving millions of households. Given that most renewable heating oil is used for qualifying purposes, these requirements offer little benefit relative to their cost. EMA urged the EPA to revise this approach and expand the definition of qualifying heating oil applications—such as backup heating for data centers or hospitals—to align with modern energy needs and enhance decarbonization efforts.
Avoiding Volatility from Small Refinery Exemptions
EMA took no stance on granting Small Refinery Exemptions (SREs) but opposes reallocating exempt volumes, which can inflate RIN prices and disrupt downstream pricing. Small marketers, unable to absorb these fluctuations, face disproportionate economic hardship. With ongoing uncertainties around SRE petitions, EMA calls for a stable and transparent RFS structure to maintain fair competition and protect consumers from price volatility.
Removal of eRINs
EMA supported the Agency’s repeal of the eRIN proposal which would have allowed automakers to generate eRINs based on the EVs they sell by establishing contracts with parties that produce electricity from qualifying biogas. EMA argued during the Biden Administration that the EPA lacked the authority to implement the proposed eRIN credit for renewable electricity because it is inconsistent with the statutory purpose of the RFS, which is to support the production of renewable fuels, not the production and sale of certain vehicle technologies that eRINS are designed to promote.
A Call for Balanced Policy
EMA’s comments underscore a commitment to biofuels as part of a sustainable energy future, balanced against the practical realities of small business fuel marketers. By aligning RFS mandates with infrastructure capabilities, stabilizing biodiesel markets, streamlining heating oil incentives, and avoiding disruptive reallocations, the EPA can foster a biofuels policy that supports energy independence, climate goals, and economic fairness. Click here to read the comments.
