GOP bill would curb renewable fuel exemptions for small refiners

House Republicans' Nationwide Consumer and Fuel Retailer Choice Act would narrow small-refinery exemptions under the Renewable Fuel Standard, the 2005 law expanded in 2007. The proposal would tighten a waiver program that has split refiners from ethanol and farm groups over who absorbs the cost of meeting federal renewable volume obligations.

Under EPA’s RFS program, a refinery with average crude oil inputs of no more than 75,000 barrels per day can seek a temporary exemption if it shows disproportionate economic hardship. That carveout has been a recurring flashpoint since EPA granted 31 SREs for the 2018 compliance year, according to the Energy Information Administration. The issue then moved into court, with the U.S. Court of Appeals for the Tenth Circuit in January 2020 vacating and remanding three EPA exemption decisions for the 2016 and 2017 compliance years.

The Supreme Court settled one major legal question on June 25, 2021, when it ruled 6-3 in HollyFrontier Cheyenne Refining, LLC v. Renewable Fuels Association that the Clean Air Act allows EPA to grant a small-refinery exemption even if the refinery did not receive one every year since the program began in 2011. EPA later reversed course again, saying on February 22, 2021, that it supported the Tenth Circuit’s interpretation in the Renewable Fuels Association case. The back-and-forth has kept the exemption program at the center of RFS compliance strategy for independent refiners.

EPA denied 26 SRE petitions in July 2023 covering compliance years 2016 through 2018 and 2021 through 2023, a step the Renewable Fuels Association praised as a protection for market integrity. The Government Accountability Office also said EPA and the U.S. Department of Energy lacked adequate information, policies and procedures to ensure exemption decisions were valid and timely, and that EPA had not fully tested the assumptions behind its hardship analysis.

The issue resurfaced on August 22, 2025, when EPA said it had resolved 175 SRE petitions from 38 refineries covering compliance years 2016 through 2024, granting full or partial exemptions on many requests and leaving some pending. The American Farm Bureau Federation and the National Corn Growers Association have urged EPA to reallocate waived gallons so the impact does not fall entirely on the biofuel market. Zippy Duvall, president of the American Farm Bureau Federation, has said full reallocation would help lower fuel costs while expanding rural economic opportunity.