Small Refineries Employ Strategy To Obtain New RFS Hardship Exemptions
The U.S. Environmental Protection Agency announced it has received 52 petitions from small refiners requesting economic hardship exemptions from compliance with the Renewable Fuel Standard (RFS). Read more here.
The petitions request retroactive exemptions back to 2013 and earlier. Typically, small refinery exemption petitions are filed annually when the EPA sets new RFS blending mandates for the upcoming year.
The retroactive filings are meant to bypass a recent federal court order limiting new hardship exemptions to only those small refineries that have been exempted from the RFS every year since 2013.
Only a handful of the 52 small refineries currently filing petitions would qualify for hardship exemptions under the new standard set by the court.
Many small refiners disagreed with the court’s decision because exemptions were not necessary in the early years of the RFS when volumetric blending mandates were lower and blending RIN credits were cheap.
If the EPA approves the retroactive petitions, the total ethanol gallons lost to hardship exemptions will continue to increase from the 2.63 billion gallons already displaced since 2016.
Economic hardship exemptions are particularly important to small refiners right now due to the dramatic drop in demand for gasoline brought on by the COVID-19 emergency.
The EPA has yet to act on the petitions and has given no indication when the exemption review process might begin.