Governors' Biofuels Coalition

EPA’s proposal to fully reallocate renewable fuel standard (RFS) biofuel blending volumes waived for small refiners to larger refiners is essential to restore balance to the biofuel credit market, the agency argues, but it also raises legal and policy questions about the agency’s power to retroactively fix problems in the program. In its unpublished Federal Register notice announcing the plan, released Oct. 13, EPA underscores the need to reallocate all waived volumes to larger refineries to compensate for additional small refinery exemptions (SREs) that the agency granted in August.

The waivers exempted small refiners from a much larger volume of biofuel blending obligations than EPA anticipated in its “Set 2” rule, which established historically large requirements for 2026 and 2027. But the proposed rule also would require EPA to act retroactively, after statutory deadlines for action have passed, in order to shift RFS obligations after the fact. This is reviving debates about the agency’s chronic lateness in meeting RFS schedules, while also inviting possible legal challenges to the reallocation. Large refiners oppose the reallocation of waived volumes

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