US Court of Appeals stays EPA's small refinery exemptions

New York — The US Court of Appeals for the District of Columbia Circuit on Jan. 21 stayed the Environmental Protection Agency's recent granting of three small refinery exemptions in response to an emergency petition from the Renewable Fuels Association, a biofuels trade group.

The morning filing ordered "EPA's actions granting small refinery exemption petitions on January 19, 2021, be administratively stayed pending further order of the court."

RIN markets reacted swiftly to the news as D6 RINs for 2021 compliance traded at 93.25 cents/RIN, up from 91.25 cents/RIN the previous day.

The agency on Jan. 19 had granted two exemptions from 2019 mandates – there had previously been none granted for 2019 – and one additional exemption for 2018, bringing to total number of 2018 exemptions to 32.

The number of denied petitions for 2018 fell by one to a total of four while the number of pending petitions was steady at three.

The EPA released fresh data on the status of small refinery exemptions on Jan. 19 at 7 pm ET, the evening before the inauguration of Joe Biden, after announcing earlier in the day the agency would "provide decisions to some small refineries that have petitioned the agency for RFS small refinery exemptions."

Data is typically released on the third Thursday of each month, generating further surprise at the Jan. 19 announcement.

Under the federal Renewable Fuel Standard, a refinery with less than 75,000 b/d of crude throughput can petition for an exemption from biofuel blending mandates if compliance would cause severe economic harm.

The biofuels industry has criticized the EPA's administration of the exemption program, saying it allows refiners to evade biofuels mandates while the oil industry praised the exemptions as a means of alleviating compliance costs.