Press Contact: Hannah Love

515-322-0435

 

WEST DES MOINES, IA – The U.S. Environmental Protection Agency (EPA) has issued a long-awaiting decision on 175 Renewable Fuel Standard (RFS) refinery exemption (SRE) requests dating from 2016 to 2024. In total, the EPA granted 63 full exemptions and 77 partial exemptions totaling 5.34 billion gallons. EPA denied 28 claims and found another 7 ineligible. 

“We must get RFS refinery waiver uncertainty out of the market and today’s action by EPA takes a big step forward,” said Iowa Renewable Fuels Association (IRFA) Executive Director Monte Shaw. “While we can quibble with the justification of the SREs granted, the EPA was spot-on in reissuing the same retired RFS credits back to the refiners who received an exemption. This is consistent with past actions when the shoe was on the other foot and is in line with the overall goals of the RFS. One absolutely vital question remains: how or if the SREs from 2023 to 2025 will be reallocated. That is a two-billion-gallon uncertainty hanging over the market and the pending RFS blending rule for 2026 and 2027.” 

Also today, EPA announced that in the near future it will release a proposed rule to outline how the exempted RFS volumes of the 2023 and later compliance years, expected to be over two billion gallons, could be reallocated. EPA has previously stated that it will account for projected SREs for 2026 and 2027 when finalizing the RFS blending levels for those years. EPA stated: “The supplemental proposal will seek to balance the goals of the RFS in supporting the production and use of renewable fuels while taking into account economic impacts, following the law, and ensuring opportunity for stakeholder comment.” 

“Full and complete reallocation of the 2023 and newer SREs is the vital point,” stated Shaw. “In the end, that will determine whether the EPA upholds President Trump’s commitment to the RFS and to American farmers. If true reallocation does not occur, then EPA is effectively reducing the already low RFS blending levels for 2025. IRFA was heartened by EPA’s announcement today that it will propose reallocating the exempted volumes. We now anxiously await EPA’s reallocation proposal, at which time we will be commenting in the strongest possible terms that reallocation of every SRE gallon must occur, and we will implore the EPA to end the SRE uncertainty before finalizing the 2026-2027 RFS rule.” 

When granted, SREs allow a refinery out of their blending obligation under the landmark RFS program, which is the bedrock renewable fuels policy in the U.S. The EPA sets an RFS blending level for each year. As a result, any SRE effectively reduces the RFS blending level. To avoid this, the RFS law called on EPA to estimate the amount of SREs likely to be granted and to factor this into the RFS blending level formula each year, a process commonly referred to as “reallocation” because it essentially upholds the RFS blending level while shifting any exempted obligation from those parties to the obligated parties that did not receive exemptions. 

“IRFA has loudly applauded the Trump administration and the EPA for the proposing record-high RFS blend levels for 2026 and 2027,” stated Shaw. “We would hate to see these volumes rendered meaningless due to billions of gallons of un-reallocated SREs. So while we greatly appreciate that the Trump Administration has signaled they will reallocate 2023 and newer refinery waivers, we must examine those details. At the end of the day, the penalty for the failure of the previous RFS rules under the prior administration to include SRE forecasts should not be paid solely by renewable fuels producers. The integrity of the RFS depends on it.” 

 

The Iowa Renewable Fuels Association represents the state’s liquid renewable fuels industry and works to foster its growth. Iowa is the nation’s leader in renewable fuels production with 42 ethanol refineries capable of producing 4.7 billion gallons annually – including 34 million gallons of annual cellulosic ethanol production capacity – and 10 biodiesel facilities with the capacity to produce 416 million gallons annually. For more information, visit the Iowa Renewable Fuels Association website at: www.IowaRFA.org.  

 

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