{
  "id": "R46244",
  "type": "CRS Report",
  "typeId": "REPORTS",
  "number": "R46244",
  "active": true,
  "source": "EveryCRSReport.com",
  "versions": [
    {
      "source": "EveryCRSReport.com",
      "id": 618499,
      "date": "2020-03-02",
      "retrieved": "2020-03-09T22:05:19.774303",
      "title": "The Renewable Fuel Standard (RFS): Frequently Asked Questions About Small Refinery Exemptions (SREs)",
      "summary": "In the Energy Policy Act of 2005 (P.L. 109-58; EPAct05), Congress required the U.S. Environmental Protection Agency (EPA) to implement the Renewable Fuel Standard (RFS)\u2014a mandate that requires U.S. transportation fuel to contain a minimum volume of renewable fuel. Since expansion of the RFS in 2007 under the Energy Independence and Security Act (P.L. 110-140; EISA), Congress has had interest in the RFS for various reasons (e.g., limited cellulosic biofuel production, EPA\u2019s use of programmatic waiver authority, and RFS compliance costs). Over the last several months, Congress has expressed repeated interest in small refinery exemptions (SRE) from the RFS.\nThe RFS allows small refineries to receive an exemption from the RFS, if they can prove compliance would subject them to disproportionate economic hardship. There is no statutory definition for disproportionate economic hardship, and a small refinery may apply for an exemption at any time. When deciding whether to grant an exemption, EPA is to consult with the Secretary of Energy. This consultation comes in the form of a recommendation from the Department of Energy (DOE) to EPA. The EPA Administrator has 90 days to act on (i.e., grant or deny) an exemption. A small refinery must apply each year for an exemption from compliance for that year. \nEPA categorizes the majority of small refinery exemption information as confidential business information (CBI). EPA does make publicly available some exemption information, but only in aggregate (e.g., total number of exemptions granted, total exempted volume of gasoline and diesel); there are no publicly available data on individual SREs. \nThere have been legal challenges about small refinery exemptions. Small refineries can and have challenged EPA\u2019s denials of their petitions for SREs in court. Various stakeholders have also challenged EPA\u2019s methodology for evaluating small refinery exemption petitions. In 2020, the Tenth Circuit vacated EPA\u2019s decision to grant three small refinery exemption petitions. It is unclear how this court decision will affect how EPA evaluates SRE petitions in the future.\nCongress may be interested in small refinery exemptions for multiple reasons. Foremost, Congress may seek clarification on how EPA is currently evaluating SRE petitions, and whether that has changed over time. Some in Congress have raised concerns over transparency in EPA\u2019s decision process on SREs, as there is limited public information on the process.\nCongress may also value additional information about how SREs are being accounted for in annual rulemakings for the RFS. Each year, EPA issues a final rule for the RFS with the coming year\u2019s volume requirements (e.g., EPA is to issue the 2021 volume requirements by November 30, 2020). This final rule contains percentage standards that\u2014once obligated parties (e.g., refiners and importers) apply them to their gasoline and diesel sales\u2014are intended to ensure the volumes required are met. The formula for calculating the annual percentage standard includes a variable that accounts for small refinery exemptions granted by the time of the rulemaking. Depending on when the small refinery exemption is granted\u2014prior to the release of a final rule or after\u2014that exemption may or may not be accounted for in the annual percentage standard (to date, most SREs have been granted afterward). In December 2019, EPA announced that it will change how it calculates the annual percentage standard in order to account for volumes of gasoline and diesel that will be exempted from the renewable volume obligations. The impact small refinery exemptions have on the RFS depends on the number of SREs granted, when they are granted, and the amount of gasoline and diesel exempted. Congress may consider several items as it seeks to understand the impact of SREs on the RFS, including transparency, agency discretion, a potential RFS reset, and U.S. gasoline consumption.",
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      "topics": [
        {
          "source": "IBCList",
          "id": 4927,
          "name": "Renewable Energy & Efficiency"
        }
      ]
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  ],
  "topics": [
    "Energy Policy"
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}