FREQUENTLY ASKED QUESTIONS

  • The RFS is a federal program administered by the EPA that requires increasing volumes of renewable fuels, such as ethanol, to be blended into the nation’s transportation fuel supply each year. Refiners and importers must demonstrate compliance with these renewable volume obligations by purchasing and retiring credits referred to as Renewable Identification Numbers (RINs).

  • The statute requires EPA to finalize annual renewable volume obligations (RVOs) at least 14 months before the beginning of the compliance year, but historically has often failed to do so. Although refineries are normally obliged to demonstrate compliance by March 31 following each compliance year, late issuance of the annual RVOs has frequently made it impossible to meet this deadline. As a result, EPA now has a regulatory mechanism to extend the March 31 compliance deadline when necessary.

  • Congress enacted the RFS in 2005 (and expanded it in 2007) to enhance U.S. energy security at a time when the nation was heavily dependent on foreign oil. The program was intended to supplement domestic fuel supplies—not to force refinery closures or raise consumer costs.

  • Congress recognized that small refineries face permanent structural disadvantages, including lack of blending infrastructure, higher transportation costs, and inability to pass compliance costs through the market. For these facilities, RFS costs are the largest operating expense after crude oil and can threaten their viability. SREs were designed as a permanent safety valve to prevent disproportionate economic hardship and refinery shutdowns.

  • The RFS statute narrowly defines a small refinery as a facility that processes no more than 75,000 barrels of crude oil per day. Eligibility is determined on a year-by-year basis using this 75,000-barrels-per-day threshold. A refinery may qualify in years it operates below the threshold and be ineligible in years it exceeds it. This definition applies to the specific refinery—not the refining company—in recognition of the unique circumstances facing individual facilities.

  • Small refineries have to petition EPA for an exemption for each compliance year and demonstrate that compliance would cause them disproportionate economic hardship.

  • No. Small refineries account for only a small share of total U.S. fuel production, and exemptions do not reduce overall ethanol consumption. Ethanol blending levels have continued to rise even when SREs are granted.

  • 37 small refineries are operating in the United States. That number is smaller than it used to be, as 13 small refineries have closed since 2009.

  • Small refineries represent nearly 10% of America’s domestic crude refining capacity. Some states or regions of the country may only have one refinery, and some of those facilities are defined as small refineries. Putting even one small refinery in jeopardy could have serious impacts on entire regions or states.

  • RIN prices are volatile and unpredictable. Small refineries often must finance RIN purchases at high interest rates, creating significant financial strain. RIN prices have skyrocketed in recent years, increasing from a few cents per gallon in 2012 to over $1.25 per gallon today.

    Check out this chart, which illustrates historical D6 RIN prices.

  • RINs are generated by registered renewable fuel producers or importers when they produce or import a batch of qualifying renewable fuel. RINs are traded in private transactions between buyers and sellers. RIN prices are unregulated and set by the market, not by the government.  

  • Courts have repeatedly rejected attempts to weaken or eliminate SREs:

    ·      The U.S. Supreme Court confirmed that SREs remain available to eligible refineries.

    ·      Federal courts overturned EPA efforts to impose unlawful hardship standards on small refineries.

    ·      Most recently, courts vacated EPA’s mass denials of SRE petitions under the Biden Administration, reaffirming that EPA must follow the statute and consider real-world economic impacts.

    These rulings underscore that SREs are not loopholes—they are a lawful and essential part of the RFS framework.

  • In August 2025, the EPA released decisions on 175 petitions for SREs, clearing a backlog spanning the 2016-2024 compliance years. In November 2025, EPA issued decisions on another 16 petitions. In each case, EPA either granted the petition in full, granted it in part, denied it, or determined the petitioner was ineligible.

  • Changes that effectively eliminate or drastically narrow SRE eligibility could place approximately 1.2 million barrels per day of U.S. refining capacity at risk—capacity that supports inland fuel markets, emergency services, manufacturing, farming, and national defense.

  • Refinery closures and reduced domestic supply would result in higher gasoline and diesel prices, particularly in rural and inland regions with limited alternative fuel suppliers. They would also undermine infrastructure development, as many small refineries are key producers of asphalt in certain regions. Higher RFS costs also increase transportation and food prices across the broader economy.

  • Proposals to redefine or curtail SRE eligibility could impact refineries across 12 states, many of which rely on small refineries as their primary source of locally produced fuel.