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By Lynn L. Bergeson

On July 2, 2021, U.S. Representatives Angie Craig (D-MN) and Randy Feenstra (R-IA) introduced a bill called the Small Refinery Exemption Clarification Act of 2021. The bill clarifies that only oil refineries that have been continuously receiving small refinery exemptions (SRE) since 2011 should be eligible to petition for extensions of renewable fuel blending requirement exemptions. The SRE Clarification Act follows the Supreme Court’s decision in late June 2021 that, according to Representatives Craig and Feenstra, could negatively influence the biofuels industry by making it easier for oil refineries to avoid Renewable Fuel Standard (RFS) blending requirements. Representative Craig stated that “[‌i]t is vital that we continue to support the clean biofuels industry as we reduce the carbon intensity of our transportation sector and make important investments across rural America.” Representative Feenstra emphasized that “we must erase ambiguities and ensure oil refineries are not able to take shortcuts when it comes to blending biofuels.”


 

By  Lynn L. Bergeson 
 
On May 25, 2021, U.S. Senators Deb Fischer (R-NE) and Tammy Duckworth (D-IL) introduced the bipartisan Renewable Fuel Standard (RFS) Integrity Act of 2021. Aiming to provide more certainty to rural America, this legislation would require that small refineries petition for RFS hardship exemptions by June 1 of each year. According to Senator Fischer, the RFS Integrity Act of 2021 would ensure that the U.S. Environmental Protection Agency (EPA) properly accounts for exempted gallons in the annual Renewable Fuel Obligations (RVO) it sets every November. The legislation would also require that EPA publish the name of the refinery and volume that is exempted at the same time that the refiner receives the exemption.


 

By  Lynn L. Bergeson and Ligia Duarte Botelho, M.A.
 
On May 25, 2021, U.S. Senators Joni Ernst (R-IA) and Chuck Grassley (R-IA) and House Representatives Randy Feenstra (R-IA), Ashley Hinson (R-IA), and Mariannette Miller-Meeks (R-IA) joined forces in a letter to urge President Biden to uphold his promise to support biofuels in the next four years. Criticizing President Biden’s efforts under the American Jobs Plan for failing to include investments in biofuels, the letter states that “advancements in biofuels can drive biofuels towards being carbon neutral or even carbon negative – something electric vehicles cannot achieve.” According to the representatives, President Biden’s American Jobs Plan focuses on investments in electric vehicles rather than supporting biofuels as a solution to reduce carbon emissions. The letter also urges President Biden to support the biofuels industry through strong Renewable Volume Obligations (RVO) for 2021, 2022, and beyond under the Renewable Fuel Standard (RFS). The letter concludes with the following statement: “Biofuels should not be treated as a transition fuel, but prioritized as a fuel of the future.”


 

By Lynn L. Bergeson
 
On May 5, 2021, the U.S. Environmental Protection Agency (EPA) published a notice of disclosure to all obligated parties under the Renewable Fuel Standard (RFS) program that have submitted small refinery exemption (SRE) petitions and to all parties whose RFS information otherwise resides in EPA’s Moderated Transaction System (EMTS).  EPA’s action is in response to a U.S. Government of Accountability Office (GAO) request to disclose such information that has been submitted to EPA that claims to be, or is determined to be, confidential business information (CBI).  The information to be disclosed includes documents and data related to SRE petitions received by EPA since the beginning of the RFS program through the present. Such records include:

  • All materials submitted by small refineries as part of its SRE petition;
  • Any documentation sent by the U.S. Department of Energy (DOE) to EPA summarizing DOE’s findings and score(s) associated with the petition(s) and any EPA responses to such petitions;
  • Any EPA record that addresses the subject of the exemption petition(s), including EPA analysis done in addition to DOE’s findings;
  • EPA’s final exemption decision sent to the refinery; and
  • RFS related transaction-level data contained in EMTS, including Renewable Identification Number (RIN) transactions under RFS.

These records and information will be shared with GAO no later than 16 days after the publication of the notice.  All CBI-claimed documents will be destroyed, deleted, or returned to EPA at the conclusion of GAO's review.

Tags: RFS, SRE, CBI, Biofuel, DOE

 

By  Lynn L. Bergeson

On April 1, 2021, the U.S. Environmental Protection Agency (EPA) issued its final modifications of certain compliance dates under the Renewable Fuel Standard (RFS) program. The final rule extends the RFS compliance deadline for the 2019 and 2020 compliance years and its associated deadlines for submission of attest engagement reports for the 2019 and 2020 compliance years for small refineries. The new 2019 compliance year and attest engagement report deadlines are now November 30, 2021, and June 1, 2022, respectively. The new 2020 compliance year and attest engagement report deadlines are now January 31, 2022, and June 1, 2022, respectively. EPA has also extended the deadline for submission of attest engagement reports for the 2021 compliance year for obligated parties to September 1, 2022. The final rule became effective on March 20, 2021.

Tags: EPA, RFS, Biofuel

 

By   Lynn L. Bergeson and Ligia Duarte Botelho, M.A. 

EPA, on January 15, 2021, issued a proposed rule to modify certain compliance dates under the Renewable Fuel Standard (RFS). The proposed deadline extension for the 2019 compliance year and the associated deadline for submission of attest engagement reports for the 2019 compliance year for small refineries are as follows: November 30, 2021, and June 1, 2022, respectively. The second extension would be for the 2020 compliance year and the associated deadline for submission of attest engagement reports for obligated parties and Renewable Identification Number (RIN)-generating renewable fuel producers and importers, among other parties holding RINs. The new deadlines for these would be January 31, 2022, and June 1, 2022, respectively.

Comments on the proposed rule must be submitted by March 11, 2021. A virtual public hearing will take place on February 9, 2021, to discuss questions and concerns about the proposed rule.


 

By   Lynn L. Bergeson and Ligia Duarte Botelho, M.A.

On January 19, 2021, EPA issued a request for comment on petitions submitted in 2020 for a waiver of the RFS obligations that apply to 2019 and 2020. The petitions argue that recent events warrant EPA exercising its general waiver authority on the basis of severe economic harm. In late March 2020, a group of small refineries requested a waiver of the 2019 and 2020 RFS obligations. In April 2020, Governors of several states submitted three petitions for waivers of the nationwide volumes. Under the Clean Air Act (CAA), EPA is granted the discretion to waive the requirements of the RFS program in whole or in part if the EPA Administrator determines, after a notice and comment, that the implementation of the applicable annual volume requirements would severely harm the economy or environment of a state, region, or the United States. Comments on the aforementioned petitions are due on February 18, 2021.


 

By Lynn L. Bergeson

On May 11, 2020, a total of 70 Mayors from various cities in the United States submitted a letter to Andrew Wheeler, U.S. Environmental Protection Agency (EPA) Administrator, criticizing the decision not to uphold the Renewable Fuel Standard (RFS) and not to reject proposed waivers under Section 211(o)(7) of the Clean Air Act. The Mayors state that this decision on waivers is already causing damage to the economy and will continue to devastate farmers, workers, and families who depend on the biofuels industry. The letter emphasizes:

The request for these waivers is unjustified under the law. Such waivers from RFS requirements may only be granted if there is a demonstration that the RFS causes severe economic harm to the economy as a whole. In reality, refiner market conditions are a result of plummeting demand for gasoline across the country, not compliance with the RFS. Further, the RFS already considers demand reduction by adjusting annual blending volumes to reflect actual motor fuel demand.

Furthermore, the signatory Mayors oppose the claim that higher Renewable Identification Numbers (RIN) prices damage biofuel refineries. Referencing an EPA market analysis, the Mayors argue that higher RIN prices are recovered in the sale of the product rather than disadvantaging merchant refiners. The letter concludes by requesting that EPA reject unjustifiable RFS waiver requests.

Tags: Biofuel, RFS

 

By Lynn L. Bergeson

On February 6, 2020, EPA issued its final rule setting 2020 renewable fuel percentage standards under its Renewable Fuel Standard (RFS) Program. The final rule established the annual percentage standards for cellulosic biofuel, biomass-based diesel, advanced biofuel, and total renewable fuel that apply to gasoline and diesel transportation fuel produced or imported in 2020. The volume requirements set are below the statutory volume targets. In addition to the 2020 annual percentage standards, the final rule establishes the applicable volume of biomass-based diesel for 2021. Other changes include the percentage standard calculations to account for fuel volumes exempted from the renewable volume obligation (RVO). Effective on April 6, 2020, this rule finalizes regulatory changes to the RFS Program, including clarifications of existing regulations, new pathways, and flexibilities for regulated parties.

Tags: RFS, Biofuel

 

By Lynn L. Bergeson and Ligia Duarte Botelho, M.A.

On January 13, 2020, U.S. Representative Cindy Axne announced that the Government Accountability Office (GAO) has responded to a bipartisan letter submitted by members of the House Biofuels Caucus (HBC) requesting an investigation into misuse of small refinery exemptions (SREs) by the U.S. Environmental Protection Agency (EPA). Submitted in August 2019, the bipartisan letter requested that GAO examine EPA’s review and approval of SRE waivers under the Renewable Fuel Standard (RFS). HBC’s letter also included a request for inspection of the U.S. Department of Energy’s (DOE) viability scores for SREs reviewed in 2018. HBC’s concerns were mostly related to the economic consequences to rural communities due to the exemption of approximately four billion gallons of fuel from the RFS in 2018. In addition to the aforementioned requests, HBC members asked that GAO also consider the following questions:

  • Has DOE changed the criteria, the interpretation of the criteria, the methodology, or any other significant aspect of how it makes its recommendations to EPA for SREs?
     
  • Other than the viability score provided by DOE, what other factors are being considered by EPA in awarding SRE waivers? How has this changed since the previous Administration?
     
  • Since the development of DOE’s 2011 methodology, what percentage of applications that received a disqualifying viability score from the DOE were granted?
     
  • How many times has DOE recommended a partial waiver for a refinery?
     
  • Has EPA granted a partial waiver?
     
  • Does EPA or DOE consider the economic viability of the parent refiner company when considering an application from an individual refinery?
     
  • Does DOE take Renewable Identification Numbers (RIN) into account when assessing relief petitions?

On January 10, 2020, GAO responded to the bipartisan request, agreeing to review matters related to the approval of SRE waivers and stating that it will begin its work shortly. Mark E. Gaffigan, Managing Director of GAO’s Natural Resources and Environment, and his staff will be in charge of the investigation.

In August 2019, Axne had also submitted a letter to EPA’s Acting Inspector General (IG), Charles Sheehan, requesting an investigation of this matter. In its response letter to HBC, GAO stated that it will be in contact with the cognizant IG’s office to ensure that efforts are not duplicated.


 
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