EPA proposes to fully reallocate additional 2025 small refinery exemption volumes

PEOSTA, Iowa — U.S. Environmental Protection Agency (EPA) Administrator Lee Zeldin proposed two options to revise the Renewable Fuel Standard (RFS) "Set 2" rule, both of which would reallocate 100% of the difference between projected and actual exempted volumes for 2025 small refinery exemptions (SREs).

EPA said its decisions on small refineries' hardship exemptions for their 2025 obligations exceeded its expectations, and an additional 770 million renewable identification numbers (RINs) worth of renewable fuels were exempted from RFS obligations. Under the first proposed approach, EPA would divide the additional 2025 SRE volume equally between the 2026 and 2027 compliance years. Under the second, it would reallocate all of that volume to the 2027 compliance year.

EPA will take public comments on the proposal until Dec 4, 2026. The agency said the proposed revision to the 2026 standards may extend the existing 2026 compliance reporting deadline of March 31, 2027.