EPA Proposes New Rule on Small Refiner Exemptions

The U.S. Environmental Protection Agency (EPA) has proposed a supplemental Renewable Fuel Standard (RFS) rule in response to President Donald Trump’s October 4 directive to expand biofuel use in 2020 and account for future small refinery exemptions (SREs). According to the National Biodiesel Board (NBB), the proposed supplemental rule is significantly different from what biofuel industry supporters discussed with the White House and EPA during September negotiations.

EPA is proposing to estimate 2020 SREs using a three-year average of the number of annual exemptions recommended by the Department of Energy. They requested comments on whether to use the 2015-2017 or 2016-2018 time frame to set the average. They further requested comment on alternate methods for estimating exemptions. Since 2016 EPA has consistently exempted higher volumes than recommended by DOE, as shown below.

The NBB has issued a press release expressing skepticism of the proposal. The proposed rule “is significantly different from the agreement that biofuel industry champions negotiated with President Trump just two weeks ago, which was to estimate future exempted RFS volumes based on the average of actual volumes exempted over the past three years,” said NBB Vice President of Federal Affairs Kurt Kovarik. “EPA is proposing a brand-new method for making the estimate - one that was never previously proposed or discussed and significantly undercounts past exemptions.

“Once again, EPA is sending a signal to the biofuel industry that the volumes it sets in annual rules can’t be trusted. The proposed estimates lack transparency and undercut the President’s commitment to ensure that biomass-based diesel volumes are fully met. The biodiesel industry will work diligently with all appropriate federal agencies to ensure that the final rule scrupulously fulfills President Trump’s promise to soybean farmers and biodiesel producers.”

EPA accepted public comments on the proposal through November 29, 2019. NEFI has been coordinating closely on this issue with NBB, the Advanced Biofuels Association (ABFA), and other allies in the biofuel industry. A final ruling on RFS volumes and the proposed SRE rule is expected by the end of the year. Oil & Energy will include an update on these issues in our January/February 2020 edition.  

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