RFA tells EPA to reallocate 100% of SRE volumes

In Washington, in testimony to the U.S. Environmental Protection Agency, the Renewable Fuels Association expressed strong disagreement with the agency’s recent decision to grant 140 small refinery exemptions (SREs) based on a new approach to determining “disproportionate economic hardship (DEH).” While RFA opposes the granting of those SREs in the first place, it supports EPA’s proposal to fully reallocate all exempted renewable fuel blending volumes.

“If EPA is going to resume granting SREs under its flawed notion of DEH, it must reallocate 100 percent of those exempted volumes,” RFA President and CEO Geoff Cooper said. “Without reallocating 100 percent of the exempted volumes, the volumes originally proposed cannot be achieved and any final volumes will be illusory.”

Cooper also objected to EPA’s reliance on the Department of Energy’s outdated small refinery study and “scoring matrix” in the SRE process. “EPA has a duty to independently evaluate petitions and assess whether a small refiner has experienced DEH,” he said. “EPA should not be deferring to the DOE’s long-outdated 2011 study and scoring matrix. In 2022, the Government Accountability Office faulted the DOE study as ‘critically flawed,’ and EPA itself asserted that the study fails to provide useful information.”

While RFA continues to oppose granting of SREs, Cooper said, “We applaud EPA for proposing to project and fully reallocate exempt volumes for 2026 and 2027. As this administration recognized in 2020, reallocation is the only way for the agency to meet its statutory obligation to ensure that the required volumes are achieved; partial reallocation cannot satisfy this duty.”

For the same reason, he added, EPA must reallocate 100 percent of the exempted volumes for 2023, 2024, and 2025. Anything less would permit obligated parties to avoid their share of the statutory mandate, shifting the burden unfairly onto renewable fuel producers. Cooper concluded that RFA believes EPA’s return of expired volume credits for 2022 and earlier is a reasonable and prudent exercise of its authority under the Clean Air Act.