EPA proposes extended deadline for blending at small refineries

Source: Marc Heller, E&E News reporter • Posted: Monday, January 18, 2021

EPA will give small refineries more time to meet biofuel-blending requirements, while a case involving waivers on the mandate awaits a ruling by the Supreme Court.

The proposed regulation would give small refineries until Nov. 30 to meet the requirement under the renewable fuel standard for the 2019 compliance year. It also would give refineries of all sizes until Jan. 31, 2022, to meet the mandate for the 2020 compliance year, an extension from March 31.

The proposed extensions reflect two sources of uncertainty in the RFS: the Supreme Court case on small refineries, expected to be heard this spring, and the agency’s monthslong delay in setting biofuel volumes for this year.

EPA will take public comment until March 11. A virtual hearing is scheduled for Feb. 9.

The proposal comes as biofuel groups and allied lawmakers say they’re worried EPA will grant some of the 66 outstanding requests for small-refinery hardship waivers pending at the agency. Delaying the compliance deadline, however, may buy the agency more time.

EPA cited the pending litigation in the published notice. The Supreme Court recently agreed to take the case, in which the 10th U.S. Circuit Court of Appeals ruled invalid three hardship exemptions granted to small refineries in Wyoming, Utah and Oklahoma.

“The resolution of the appeals process for the RFA case has the potential to impact the availability of SREs going forward,” the agency said, referring to small refinery exemptions.

“Because of the uncertainty both leading up to the March 31, 2020, deadline and of SREs going forward, we do not believe it would be appropriate to require small refineries to demonstrate compliance with their 2019 obligations pending ongoing appeals of the RFA decision,” EPA said.

If the Supreme Court agrees with the 10th Circuit ruling, EPA would be able to grant far fewer exemptions because the agency could only extend ones from earlier programs.

The incoming Biden administration will have the final say on the deadlines in the proposed rule.

In another development on biofuel policy, EPA proposed new labeling requirements for E15 fuel, which is 15% ethanol. The labels on gas pumps warn of potential damage to engines in cars built before 2000, as well as to smaller engines in boats, lawn mowers and other equipment.

The proposed rule is to be published in the Federal Register on Jan. 19 and will be open to public comment for 90 days.

In response to biofuel industry complaints that the current labels scare customers away from the higher-ethanol fuel, the agency said it’s weighing two choices: to clarify and, in some cases, soften the language on the labels, and to change their color from orange to blue and white.

Among changes in wording, the proposed label would say “avoid use in” rather than “don’t use in,” and “safe for use in” instead of “only use in.”

In the proposal, EPA said fewer older vehicles are on the road as time goes by, reducing the danger for motorists. But small engines remain at risk, the agency said.

“We continue to believe there are millions of such products in use that could potentially be misfueled on E15,” EPA said.

EPA said it’s also considering removing the labels altogether — an idea that could please the biofuel industry while sparking strong opposition from groups representing boaters and ethanol critics.

“Some stakeholders have suggested that removing the label would encourage the use of E15 by consumers who can lawfully use E15 but who do not do so because they are confused by the label,” EPA said.