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EPA denies gap-year RFS waivers

At least 54 of 68 proposed small refinery waivers were denied, which will help boost ethanol demand and eliminate uncertainty.

The Environmental Protection Agency announced Monday that it will be denying petitions for small refinery exemptions for past compliance years, the so-called “gap-filling” petitions for the 2011-18 compliance years. The move was welcomed by the biofuel industry after pressure political pressure in recent months called on the Administration to follow the intent of the law as originally written by Congress.

In total, the agency had received 68 retroactive exemption requests from petroleum refiners seeking to skirt obligations under the Renewable Fuel Standard (RFS), and Monday’s move denies the majority of pending requests.

Since March 2020, 17 small refineries in 14 states in seven federal judicial circuits had submitted 68 individual petitions asking EPA either to reconsider exemption denials or grant exemptions for prior years in which the refineries had sought them (54).

In its decision, EPA noted that it “seems unlikely that Congress contemplated or intended to allow a small refinery to obtain hardship relief through submitting a petition in calendar year 2020 for RFS compliance year 2011, for example.”

EPA said based on the U.S. Department of Energy’s recommendations, it is “denying the exemptions for the gap-filling petitions that seek reconsideration of prior EPA decisions because those small refineries have not provide any new information that would necessitate EPA changing its prior decisions for those RFS compliance years.”

In August, Sen. Joni Ernst (R., Iowa) joined Iowa leaders and President Donald Trump in Cedar Rapids, Iowa, to discuss the impact of the derecho windstorm on the state, and during their meeting, Ernst told the President directly about the concerns of Iowa’s farmers and producers regarding the “gap-year” small refinery exemptions. At the time, Trump said he would handle the situation.

“I’ve been calling for these ‘gap-year’ waivers to be thrown out since they were announced,” Ernst said. "Now, the Administration has listened to our calls for action. Today’s announcements will help provide more certainty to our biofuel producers -- who have, for too long, been yanked around by the EPA -- and help increase access to E15, which drives up demand for corn and ethanol."

Sen. Chuck Grassley (R., Iowa) also welcomed the announcement. “I’m glad the EPA is listening to our feedback and common sense from farmers and biofuel producers. The rejection of these exemptions comes after a thorough review process from both the EPA and the Department of Energy,” Grassley said.

“We are pleased to see EPA is officially denying 54 so-called ‘gap-year’ small refinery exemption petitions, and we look forward to EPA similarly denying the remaining 14 petitions once they are received from DOE. Rejecting the petitions is simply the right thing to do, and today’s decision marks a big step forward toward fully restoring integrity to the Renewable Fuel Standard. This should serve as the final nail in the coffin of these gap-year petitions, and we are eager to put this dark and sordid chapter in the history of the RFS behind us once and for all," said Renewable Fuels Assn. President and CEO Geoff Cooper.

EPA is also “moving to update E15 labels to ensure consumers have informed choices at the pump and clarify the ability of existing fuel infrastructure to support expanded E15 use.”

“Today’s action lifts a cloud of uncertainty that has been hanging over America’s farmers and biofuel producers since June,” Growth Energy chief executive officer Emily Skor said. “We’re grateful to farm state champions like Sen. Ernst, who has led a bipartisan coalition of lawmakers in the House and Senate and governors across the heartland in speaking out against oil-backed efforts to dodge the law, circumvent the courts and upend markets.”

TAGS: Policy
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