Growth Energy submits supplemental comments on EPA’s SRE proposal

By Growth Energy | March 10, 2022

Yesterday, Growth Energy submitted supplemental comments to the U.S. EPA further supporting EPA’s proposal to deny 65 pending small refinery exemptions (SREs) before the agency and pushing back on erroneous comments challenging EPA’s interpretation of its authority for the denials.

In its supplemental submission, Growth Energy reinforces EPA’s analysis of the economics of RFS compliance and supports the agency’s standard for showing disproportionate economic hardship under the RFS, which would require denial of the 65 pending SREs.

“In February, EPA proposed a full sweep denial of 65 pending SREs before EPA, a move that would provide the biofuels industry with certainty in the marketplace and the encouragement that the years of SRE abuse are over,” said Growth Energy CEO Emily Skor. “EPA should be steadfast in its findings that SREs can only be granted in a narrow set of circumstances of disproportionate economic hardship caused solely by compliance with the RFS. It should ignore continued erroneous claims from oil industry commenters seeking to avoid blending more homegrown, low-carbon biofuels into their fuel. With historically high gas prices amid the war in Ukraine, we need more American biofuels available at the pump – not less.”

Background

In its proposal, EPA presents a statutory interpretation of the SRE provisions of the Clean Air Act that would, upon application to 65 pending SRE petitions, lead EPA to deny all 65 petitions. The interpretation would lead EPA to conclude that none of the 65 pending SRE petitions meet the “disproportionate economic hardship” standard for SREs, for three reasons: (1) no refiner bears RFS compliance costs that are disproportionate relative to others’ costs; (2) obligated parties recover RFS compliance costs and thus they do not suffer economic hardship; and (3) because of (1) and (2), none of the 65 SRE petitioners bear disproportionate economic hardship.

EPA supported its proposal by interpreting the RFS to require refineries to show that any hardship must be caused by compliance with the RFS itself, and not by other factors external to the RFS. In addition, EPA proposed further to find (which it has consistently found since at least 2015) that refiners recover the costs of acquiring RINs to achieve RFS compliance and, therefore, that small refineries do not suffer from economic hardship, let alone disproportionate economic hardship, from compliance with the program.

Growth Energy has been a leader in the charge to end the abuse of small refinery exemptions, repeatedly urging EPA to faithfully implement rigorous standards for SRE eligibility, as it is required to do so under the RFS. In addition to submitting comments to EPA’s SRE denial proposal, Growth Energy challenged EPA’s improper, blanket grant of 31 SREs for the 2018 compliance year in the D.C. Circuit Court of Appeals; those SREs are now under review by EPA upon remand from the court, and Growth has urged EPA to deny them on the same grounds as contained in this proposed SRE exemption denial decision. In addition, Growth Energy submitted comments on Friday in response to the proposed 2020, 2021, and 2022 Renewable Volume Obligations (RVOs), urging EPA to ensure that any future SREs are accounted for during the RVO rulemaking process, and to ensure that past SREs issued retroactively, after RVOs were finalized, be made up in future RVO years.