EPA Clears Backlog of Small Refinery Exemptions, Reaffirms Partial Relief Policy

The Environmental Protection Agency has resolved 175 refinery exemption petitions dating back to 2016, granting full or partial relief to 140 facilities while reaffirming its policy to balance refinery hardship with renewable fuel mandates.

• By Stasia DeMarco
• August 22, 2025

The EPA said Friday it is clearing a backlog of 175 Small Refinery Exemption petitions covering compliance years 2016 through 2024, in a move officials say will put the Renewable Fuel Standard program “back on track.”

EPA granted 63 full exemptions, 77 partial exemptions, denied 28 petitions, and found seven ineligible, according to the agency. The petitions came from 38 small refineries nationwide.

EPA said the decisions were made after consultations with the Department of Energy and a review of refinery-specific information, consistent with the Clean Air Act and federal case law.

Policy Reaffirmed

The agency also reaffirmed a policy established during the Trump administration to grant partial relief — typically a 50 percent exemption — when a small refinery demonstrates partial hardship. That approach differs from the DOE’s 2011 study, which would have denied exemptions even to facilities facing limited hardship.

“Some small refineries are impacted more significantly than others, and EPA’s relief should reflect those differences,” the agency said in a statement.

Compliance Credits and Biofuel Supply

EPA also confirmed that when exemptions are granted for prior years, refiners can reclaim Renewable Identification Numbers (RINs) previously retired for compliance. However, because RINs have only a two-year life, credits generated in 2022 or earlier cannot be applied toward 2024 or future obligations.

The agency said this means older RINs will not affect the supply available for 2024 and beyond, and the decision is not expected to impact demand for biofuels.

Looking Ahead

EPA plans to send a supplemental proposed rule to the White House Office of Management and Budget soon. That proposal will address how exempted volumes for 2023 and later compliance years should be reallocated. EPA does not plan to revisit exemptions granted from 2016 through 2022.

The forthcoming rule will also outline how EPA intends to project exemptions for 2026 and 2027 as it finalizes annual blending targets. Officials said the goal is to balance economic considerations with the RFS mandate to expand renewable fuel use.

Program Background

The decision follows EPA’s June proposal for RFS volume requirements for 2026 and 2027, part of its so-called “Set 2” rulemaking. That proposal, strongly backed by the Trump administration, aims to expand the role of homegrown biofuels, support rural economies, and bolster U.S. energy security.

The public comment period on the “Set 2” proposal closed Aug. 8. EPA is now reviewing submissions and said it will accept additional comments once the supplemental rule is published.

For more details, EPA directed stakeholders to its Renewable Fuel Standard program website.