The American Coalition for Ethanol (ACE) has submitted comments to the US Environmental Protection Agency’s (EPA) proposal to deny petitions for Small Refinery Exemptions (SREs).“ACE strongly supports EPA’s proposed decision to deny all pending SRE petitions by finding the petitioning refineries do not face disproportionate economic hardship (DEH) caused by compliance with their RFS obligations,” writes ACE CEO Brian Jennings.
The comments, submitted on February 7, 2022, provide background on the litigation that compels EPA to deny the pending SREs, including precedent established by the Tenth Circuit Court in HollyFrontier v. Renewable Fuels Association (RFA), which ACE was a petitioner on, and a subsequent decision by the Supreme Court in HollyFrontier Cheyenne Refining, LLC v. RFA.
EPA’s proposed denial of all pending SRE petitions complies with the Tenth Circuit Court ruling in that:
- The cause of refinery “hardship” must be the RFS, rather than general economic factors; and
- EPA’s determination that RFS compliance costs are essentially a pass-through that is not ultimately born by refiners prevents RIN prices from being used to justify waivers.
ACE says that it is also encouraged that EPA proposed to evaluate future SRE petitions based on these two restraints. The submitted feedback highlights the stringent threshold that must be met to prove the RFS is the cause of economic harm, citing precedent from 2008 (economic recession) and 2012 (drought) that provide narrow authority and require implementation of the RFS itself to be the cause of economic harm.
ACE’s comments conclude by backing up EPA’s correct interpretation that renewable identification number (RIN) prices do not cause economic harm with several relevant findings from EPA and others.
“EPA’s proposed rulemaking denying the pending SRE petitions complies with the long-held position that RIN prices cannot be evidence of economic harm in seeking a waiver from RFS obligations,” the comments read.
