EPA grants three small refinery exemptions for 2024, excusing 160 million RINs of biofuel obligations

In April, when EPA set the Renewable Fuel Standard (RFS) mandates for 2026 and 2027, it wrote that it had “issued decisions for all the 2023 and 2024 SRE petitions that were before the Agency” and used the final 2023 and 2024 exemption totals to size its add-back of lost demand^[3]. On August 3 it decided six more small refinery exemption (SRE) petitions covering those same two years, and exempted 160 million renewable identification numbers (RINs) of 2024 obligations^{[1, 2]}.

RINs are the credits refiners and importers retire to show they met their share of the mandate, so every exempted RIN is a gallon-equivalent of biofuel demand the program no longer requires from that refinery. The notice ran in the Federal Register on August 5^[1].

The details: one full exemption, two halves, three turned away

The six petitions came from four refineries^{[1, 2]}. EPA’s tally^[2]:

• 2023 compliance year: two petitions, both ruled ineligible, zero RINs exempted.
• 2024 compliance year: four petitions; one full (100 percent) exemption, two partial (50 percent) exemptions, one ineligible. Total exempted: 160 million RINs.
• Denials: none.

The three ineligible petitions came from two refineries. One ran more than 75,000 barrels of crude a day in 2023; the other topped that line in both 2023 and 2024^[2]. Under the Clean Air Act, a “small refinery” is one whose average daily crude throughput for a calendar year does not exceed 75,000 barrels, and EPA requires a refinery to meet that test in the year it wants exempted^{[2, 5]}.

EPA did not name any of the four plants. The refinery-specific appendices, including the Department of Energy (DOE) scores, are withheld because the companies claimed them as confidential business information, and EPA says it has not yet ruled on those claims^[2].

The method is the one EPA adopted in August 2025. DOE scores each petition on a matrix it built in a 2011 study, with one section for “disproportionate impacts” and one for “viability impairment”^[2]. EPA treats that score as “a reasonable proxy” for hardship and defers to it unless its look at other economic factors points to a different result^[1]. In this round, EPA wrote, its review of refinery-specific facts “did not change the final decision for any of the SRE petitions”^[2]. The half exemptions rest on EPA’s reading that the statute lets it find “partial” hardship, a position it says applies nationwide^[1].

How the relief is delivered matters as much as the grant. Most small refineries had already retired RINs for 2024. EPA will hand those credits back: all of them for a full exemption, half for a partial one^[2]. The 2024-vintage RINs that come back can be traded or used against open 2025 obligations^[2]. EPA says it chose returning retired credits over minting new ones because a sudden influx of current-year RINs would push RIN prices down and weaken investment in renewable fuel production^[2].

Affected refineries must file revised 2024 compliance reports before the 2025 compliance deadline of September 1, 2026. A partially exempted refinery that carried a 2024 deficit into 2025 can retire more 2024 RINs toward the half it still owes, also by September 1^[2].

Why the April add-back may not cover these 160 million RINs

The April 1 final rule for 2026 and 2027 did something new. After the August 2025 decisions on 175 petitions, which granted 64 full and 76 partial exemptions, and November 2025 decisions on 16 more, EPA added “SRE reallocation volumes” on top of the base mandates^[3]. Those volumes equal 70 percent of the exempted obligations for 2023 through 2025^[3].

The August 2025 round exempted 1.4 billion RINs as counted at the time of EPA’s September 2025 proposal, and the November round added 0.5 billion^[3]. The rule spread the add-back over two years: 2026 carries all of the reduced 2023 total and half of 2024, and 2027 carries the other half of 2024 plus a projected 2025 figure^[3].

For 2023 and 2024, EPA used “actual exempted RVOs,” pulled from compliance data, because it had decided every petition then before it^[3]. The Aug. 3 grants add 160 million RINs of 2024 relief after that count was taken^{[2, 3]}. That is roughly 8 percent of the 1.9 billion RINs from the two 2025 rounds. Had the 70 percent rate applied, it would have meant about 112 million RINs added back.

The decision document does not mention reallocation at all^[2]. The April rule said the add-back term applies “only” to 2026 and 2027, and that EPA intends to go back to projecting exempted fuel in advance “such that there will be no need to include SRE reallocation volumes in this manner again”^[3]. Whether a late 2024 grant gets any add-back is a question EPA has left open.

In the field: corn ethanol and soybean oil demand

For corn growers, the headline mandate is the implied conventional biofuel volume, which the April rule held at 15 billion gallons in both 2026 and 2027, a level EPA itself acknowledged supply may fall short of^[3]. Exemptions do not change that printed number. They change how much of it is enforced against specific refiners, and they put retired credits back into circulation.

That second effect is the one to watch. The April rule counted more than 2.5 billion non-cellulosic advanced carryover RINs and nearly 1.1 billion conventional carryover RINs in the market, and intended the reallocation volumes to be met from that pool rather than from new gallons^[3]. Returned 2024 RINs add to the stock refiners can draw on for 2025 compliance before September 1^[2].

For soybeans, the link runs through biomass-based diesel. EPA wrote that the 2026 and 2027 requirements reflect projected growth in domestic feedstock supply, “primarily soybean oil,” with smaller gains in used cooking oil and animal fats^[3]. A full exemption zeroes out every renewable volume obligation a refinery carries for the year, the biomass-based diesel category included, and a partial one halves them^[2].

At 160 million RINs, this round is small next to the 2025 decisions. Its weight is in the precedent: EPA again chose to grant partial relief, defer to DOE scoring and return old credits, and it says it will keep using that approach^{[2, 3]}.

On the Hill and in court: twenty years of the same fight

Congress wrote the exemption into the Energy Policy Act of 2005. A small refinery “may at any time petition” EPA for an extension “for the reason of disproportionate economic hardship,” and EPA must weigh the DOE study “and other economic factors,” acting within 90 days^[5]. The law never defines hardship^[2].

The half-exemption idea also traces to Capitol Hill. EPA’s decision recounts that report language accompanying the 2016 omnibus appropriations law directed DOE to recommend a 50 percent waiver when a refinery’s score crossed the threshold on either part of the matrix, and later Senate report language told EPA to follow DOE or explain itself to appropriators^[2].

The Government Accountability Office (GAO) reviewed the program in November 2022. It found small refineries paid more on average for compliance credits than large refineries, that EPA had no written procedures for deciding petitions, and that EPA routinely missed the 90-day deadline; in 5 of the 9 years GAO analyzed, EPA took more than 200 days to decide over half the petitions^[4].

The courts have pushed the agency back and forth. EPA denied 105 petitions in 2022 on the premise that every refinery passes RIN costs through to fuel buyers^[2]. The D.C. Circuit vacated those denials in 2024 in Sinclair IV, holding that EPA had focused on compliance costs rather than hardship and had not shown each refinery recovered its costs^[2]. The Supreme Court ruled on venue in June 2025 in Calumet, and EPA’s notice leans on that decision to steer challenges to the D.C. Circuit^{[1, 2]}.

The refiners have their own case pending. In a footnote, EPA cites a joint brief in REH Company, LLC v. EPA, No. 25-1180, in the D.C. Circuit, raising “uncertainty” over how DOE scores one matrix metric, 3.a, and says it will work with DOE to make that scoring clearer “for future petitions”^[2].

What to watch

• Sept. 1, 2026: 2025 RFS compliance deadline and the cutoff for revised 2024 reports and added 2024 RIN retirements^[2].
• 60 days from Aug. 5: window for petitions for review in the D.C. Circuit^{[1, 2]}.
• 2025 petitions: the April rule’s 2025 add-back rests on a three-year average because no 2025 decisions had been issued, and this round decided none^{[2, 3]}.

Whether the 160 million RINs from August 3 get folded into any future standard is not addressed in either EPA document published this week.