Federal GAO Determines Small Refiners Pay More To Comply With The RFS

Last week, the federal Government Accountability Office (GAO) found that smaller oil refiners pay more for credits to comply with biofuel blending requirements than do larger integrated oil companies.

According to GAO, from 2013 to 2021, companies that tended to trade lower quantities of RINs, often smaller refiners, were either paying more to buy RINs or receiving less when selling RINs, relative to larger companies, although it is unclear the extent to which it affected individual small refiners.

This year, EPA denied all pending small refinery exemption petitions for 2019 through 2021. The EPA said it had concluded small refineries recover the cost of RINs in the price of the gasoline and diesel they sell, known as RIN pass-through.

However, GAO has now found that the methodology to determine hardship and exemption eligibility is flawed.

“EPA’s ethanol mandate has been crushing America’s small refineries for years. That’s especially true in my home state of Wyoming, where small refineries play a critical role in supplying families and businesses the energy they need. Today’s report shows that the Biden administration has arbitrarily denied small refineries relief from this mandate. It is high time that the administration reverse course, grant relief to small refineries, and clean up its gross mismanagement of this program,” said U.S. Senate Energy and Natural Resources Committee Ranking Member John Barrasso (R-WY).

“Small refineries, including those in West Virginia, often can’t comply with burdensome RFS regulations, yet their exemption requests have been met with delayed decisions and blanket denials based on flawed metrics. It’s encouraging to see the GAO report recommend the EPA reassess its procedures, improve its decision-making, and, importantly, stop penalizing small refineries,” said Senate Environment and Public Works Committee Ranking Member Shelley Moore Capito (R-WV).

Click Here to read the GAO Report.

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