Media Contact: Hannah Love

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WEST DES MOINES, IA – The U.S. Environmental Protection Agency (EPA) today issued a draft rule regarding the potential reallocation of recently granted Renewable Fuel Standard (RFS) refinery exemptions (SREs) from years 2023 and 2024 as well as for the estimated amount SREs expected for 2025. Combined, this rule will impact over two billion gallons of renewable fuels demand. In the draft rule, EPA proposed reallocating 100% of the RFS exemptions or only 50%, while also soliciting comment on doing no reallocation at all. Any reallocated volumes would be added to the 2026-2027 RFS blending volumes under the proposal. 

“Just a few weeks ago IRFA praised the EPA for committing to full reallocation in the 2026-2027 RFS rule, but that commitment should start now with 2023-2025 exemptions – not in 2026,” stated Iowa Renewable Fuels Association Executive Director Monte Shaw. “IRFA strongly supports the EPA proposal for full reallocation. The co-proposal that would reallocate only 50% of the SREs would be bad news for farmers. Make no mistake, not reallocating any RFS exemption is a direct cut to renewable fuels demand. With farmers already struggling due to low RFS levels set by the previous administration, the last thing we want to see is more cuts. We also cannot ignore that the draft rule asks for comments on doing absolutely no reallocation. That approach would be a gut punch to farmers.” 

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 believes most of the RFS exemptions granted for 2023-2024 were not actually justified under sound economic analysis,” stated Shaw. “But if EPA grants them, it must reallocate them. IRFA has loudly applauded the Trump administration and the EPA for the proposing record-high RFS blend levels for 2026 and 2027. We would hate to see these volumes effectively cut by two billion gallons of un-reallocated SREs. The penalty for the failure of previous RFS rules to include SRE forecasts should not be paid by farmers and renewable fuels producers.” 

 

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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