The US House of Representatives has voted to approve changes to the small refinery exemption (SRE) programme, which allows some small oil refineries to avoid part of their obligation to blend renewable fuels or buy renewable fuel credits (RINs), Ethanol Producer wrote.
The Nationwide Consumer and Fuel Retailers Choice Act would eliminate the current SRE programme, where small refineries must petition the Environmental Protection Agency (EPA) for a waiver of Renewable Fuel Standard (RFS) renewable volume obligations (RVOs) due to disproportionate economic harm, the 14 May report said.
Instead, starting in 2028, small refineries would automatically be granted a 75% exemption from the RVO.
The proposed act redefined what constituted a small refinery, which the CBO said was expected to reduce the number of qualifying small refineries.
The EPA would also be prevented from reallocating any RVOs waived as part of the automatic 75% exemption for small refining companies, although specific at-risk refineries would be eligible for a complete RVO waiver.
SREs had been a key point of debate within the RFS as these exemptions had reduced overall biofuel demand by lowering the number of gallons obligated parties were required to blend, creating uncertainty for farmers and biofuel producers, Farm Bureau wrote on 5 May.
The changes to the SRE programme were expected to disproportionately affect demand for biomass-based diesel, Ethanol Producer wrote.
Exempted gallons were likely to be met disproportionately with biomass-based diesel (rather than ethanol) as the EPA set record 2026 and 2027 RVOs in March, with growth concentrated in biomass-based diesel and advanced fuels.
Biomass-based diesel volumes were finalised at 8.86bn gallons (33.54bn litres) in 2026 and 8.95bn gallons (33.88bn litres) in 2027, increasing to 9.07bn (34.33bn litres) and 9.20bn gallons (34.83bn litres) respectively, when accounting for small refinery SRE reallocations.
Advanced biofuel volumes were set at 10.82bn gallons (40.96bn litres) in 2026 and 10.98bn gallons (41.56bn litres) in 2027, rising to 11.10bn gallons (42.01bn litres) and 11.32bn gallons (42.84bn litres) after SRE adjustments.
Growth in these categories reflected expanding renewable diesel capacity and strong demand for low-carbon fuels, particularly those derived from soyabean oil and other fats and oils, Farm Bureau wrote.
The bill, approved by the House on 12 May, would also enable year-round sales of E15 (a 15% blend of ethanol in petrol/gasoline). It now needs to be approved by the Senate before becoming law.
