EPA finalized a rule to extend the renewable fuel standard program’s compliance deadlines for 2019 and 2020 as well as extended the deadlines for small refineries to meet their 2020 Renewable Volume Obligations. The action was criticized by ethanol groups who said refiners have had ample time to purchase renewable identification numbers to account for shortages of blended renewable fuels.
“Among other actions, EPA is today extending the regulatory deadline for small refineries to comply with their 2019 RFS obligations from March 31, 2020, to November 30, 2021, because litigation pending before the United States Supreme Court is expected to resolve legal questions regarding some small refineries’ eligibility to receive annual exemptions from their 2019 regulatory obligations,” EPA says in its notice.
Renewable Fuels Association President and CEO Geoff Cooper previously commented to EPA on March 11 that EPA’s proposal to extend the compliance deadlines for refiners to meet their 2019 and 2020 renewable volume obligations was “unnecessary, and the timelines are excessive.”
“All that the extensions would do is compound problems that the EPA itself created under the last administration: the massive and unjustified increase in small refinery exemptions and the failure to finalize the 2021 renewable volume obligations by the statutory deadline. The rationale that the EPA laid out is either not valid or not sufficient to extend the RFS compliance deadlines,” Cooper explains.
More than 14 months have passed since the end of 2019, and almost exactly one year has passed since the regulatory deadline for submitting annual compliance demonstration reports, RFA commented to EPA.
“The usage of biofuels toward the annual RVOs has long since occurred. If refiners did not use a sufficient volume of biofuels at that time and did not own enough renewable identification numbers to cover the differential, they could have brought RINs at historically low prices during most of the period since then. In fact, RIN prices were considerably lower in March 2020 than they are in March 2021,” RFA writes.
Growth Energy CEO Emily Skor also expressed disappointment in EPA’s decision. “Refiners using COVID-19 as a pretext to attack the Renewable Fuel Standard is wrong, as biofuel producers were among the hardest hit by COVID-19, with over half the industry offline at the peak of the crisis,” Skor says.
“These refineries have had ample time to blend more biofuels and comply with the RFS. We urge EPA to move expeditiously to finalize the 2021 and 2022 RVO, as well as restore the 500 million gallons that have been pending since 2017,” Skor says.
Earlier this month, Growth Energy Senior Vice President of Regulatory Affairs Chris Bliley also testified before EPA rejecting the refiners’ ask for an extension and submitted comments to the agency.
“The intent of the RFS is to blend more biofuels into our nation’s transportation fuel supply. It is not meant to have oil companies use questionable tactics to avoid blending biofuels and then demanding that the agency further delay compliance,” Bliley wrote.
From 2016 until 2020, the Trump EPA granted an unprecedented 88 small refinery exemptions costing the biofuels industry more than 4.4 billion gallons of lost demand.
Given the EPA’s new position on allocating SREs, RFA’s comments noted that the number of SREs going forward is likely to be considerably less than in compliance years 2016-2018, since there are at most seven refineries that could have received continuous exemptions according to EPA’s data.
“As a result, continuing to place 2019 compliance on hold pending final resolution of the three SREs at issue in the Supreme Court’s review of the RFA decision is not merited and would be excessive,” RFA commented.