April 2022 Denial of Petitions for RFS Small Refinery Exemptions

Action Summary

EPA is taking action to respond to an order from the U.S. Court of Appeals for the D.C. Circuit, which remanded 36 2018 small refinery exemption (SRE) decisions taken under the Renewable Fuel Standard (RFS) program and ordered EPA to issue new decisions by April 7, 2022. To meet this obligation, EPA is denying the 36 remanded SRE petitions for the 2018 compliance year. EPA is still considering petitions from other refineries for compliance years ranging from 2016–2021.

The denials issued apply EPA’s new interpretation of the Clean Air Act SRE provisions, consistent with a U.S. Court of Appeals for the Tenth Circuit holding in Renewable Fuels Association et al. v. EPA. The Tenth Circuit held that SREs may only be granted when a small refinery’s hardship is caused by compliance with the RFS program. The decision changes and remedies EPA’s prior approach to SRE decisions, under which EPA found basis to grant hardship exemptions where no hardship from RFS compliance existed. After reviewing more than a decade of RFS market data, public comments on a proposal EPA issued in December 2021, and confidential information submitted by petitioners, EPA concluded that none of the 36 2018 SRE petitions demonstrated hardship caused by compliance with the RFS program.

Concurrent with this denial action, EPA is also taking action to provide an alternate compliance approach that allows 31 small refineries to meet their new 2018 compliance obligations without purchasing or redeeming additional RFS credits. EPA is granting this compliance flexibility because the Agency has determined that there are extenuating circumstances specific to this set of petitions, including the fact that SRE petitions were previously granted.

This decision is a final Agency action.

Action History

Read the December 2021 proposal to deny all pending SRE petitions.

Additional Resources

• Notice of April 2022 Denial of Petitions for Small Refinery Exemptions Under the Renewable Fuel Standard Program (pdf) (published April 25, 2022)
• April 2022 Denial of Petitions for RFS Small Refinery Exemptions (pdf) (April 2022, EPA-420-R-22-005)
• April 2022 Denial of Petitions for RFS Small Refinery Exemptions: Appendices (pdf) (April 2022, EPA-420-R-22-005A)
• April 2022 Alternative RFS Compliance Demonstration Approach for Certain Small Refineries