Notice2026-15905
Notice of August 3, 2026 Decisions on Petitions for Small Refinery Exemptions Under the Renewable Fuel Standard Program
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Published
August 5, 2026
Issuing agencies
Environmental Protection Agency
Abstract
The Environmental Protection Agency (EPA) is providing notification of its final action entitled August 3, 2026 Decision on Petitions for RFS Small Refinery Exemptions ("August 3, 2026 SRE Decisions Action") in which EPA issued decisions on 6 small refinery exemption (SRE) petitions under the Renewable Fuel Standard (RFS) program. EPA is providing this notification for public awareness of, and the basis for, EPA's decision announced on August 3, 2026.
Full Text
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<title>Federal Register, Volume 91 Issue 149 (Wednesday, August 5, 2026)</title>
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[Federal Register Volume 91, Number 149 (Wednesday, August 5, 2026)]
[Notices]
[Pages 50532-50535]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-15905]
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ENVIRONMENTAL PROTECTION AGENCY
[FRL-13217-01-OAR]
Notice of August 3, 2026 Decisions on Petitions for Small
Refinery Exemptions Under the Renewable Fuel Standard Program
AGENCY: Environmental Protection Agency (EPA).
ACTION: Decision on petitions.
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SUMMARY: The Environmental Protection Agency (EPA) is providing
notification of its final action entitled August 3, 2026 Decision on
Petitions for RFS Small Refinery Exemptions (``August 3, 2026 SRE
Decisions Action'') in which EPA issued decisions on 6 small refinery
exemption (SRE) petitions under the Renewable Fuel Standard (RFS)
program. EPA is providing this notification for public awareness of,
and the basis for, EPA's decision announced on August 3, 2026.
[[Page 50533]]
DATES: August 5, 2026.
FOR FURTHER INFORMATION CONTACT: Campbell Martin, Office of
Transportation and Air Quality, Environmental Protection Agency, 1200
Pennsylvania Avenue NW, Washington, DC 20004; telephone number: (202)
564-5209; email address: <a href="/cdn-cgi/l/email-protection#520100177f0237263b263b3d3c21123722337c353d24"><span class="__cf_email__" data-cfemail="366564731b6653425f425f5958457653465718515940">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
I. Background and Final Action
The Clean Air Act (CAA) provides that a small refinery \1\ may at
any time petition EPA for an extension of the exemption from the
obligations of the RFS program for the reason of disproportionate
economic hardship (DEH).\2\ In evaluating such petitions, the EPA
Administrator, in consultation with the Secretary of Energy, will
consider the findings of a Department of Energy (DOE) study and other
economic factors.\3\
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\1\ The CAA defines a small refinery as ``a refinery for which
the average aggregate daily crude oil throughput for a calendar year
. . . does not exceed 75,000 barrels.'' CAA section 211(o)(1)(K).
\2\ CAA section 211(o)(9)(B)(i).
\3\ CAA section 211(o)(9)(B)(ii).
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In the August 3, 2026 SRE Decisions Action,\4\ EPA is acting on 6
individual SRE petitions from 4 refineries seeking an exemption from
their RFS obligations for the 2023 and 2024 compliance years. In
consultation with DOE, EPA reviewed all the information submitted by
each individual refinery in support of its petition. After careful
consideration of all statutory factors and the information submitted by
the refineries, EPA is granting full (100 percent) exemptions to 1
petition, granting partial (50 percent) exemptions to 2 petitions,
denying 0 petitions, and determining 3 petitions to be ineligible.
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\4\ EPA. (Aug. 2026). August 3, 2026 Decision on Petitions for
RFS Small Refinery Exemptions. EPA-420-R-26-004.
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The August 3, 2026 SRE Decisions Action articulates EPA's
interpretation of section 211(o)(9) of the CAA and EPA's authority with
respect to SRE petitions. As required by CAA section 211(o)(9), EPA's
final actions on the pending SRE petitions are based on the legal and
factual analysis presented herein, after consulting with DOE, and
considering the DOE Small Refinery Study and ``other economic
factors.''
The August 3, 2026 SRE Decisions Action also explains how EPA will
implement SRE decisions when an exemption is granted.
II. Judicial Review
Section 307(b)(1) of the CAA governs judicial review of final
actions by EPA. This section generally provides that petitions for
judicial review of final actions that are nationally applicable must be
filed in the United States Court of Appeals for the District of
Columbia Circuit, and petitions for judicial review of actions that are
locally or regionally applicable must be filed in the appropriate
regional circuit.\5\ However, petitions for judicial review of a final
action that is locally or regionally applicable must be filed in the
D.C. Circuit when ``such action is based on a determination of
nationwide scope or effect and if in taking such action the
Administrator finds and publishes that such action is based on such a
determination.'' \6\
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\5\ CAA section 307(b)(1).
\6\ Id.
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As the Supreme Court recently articulated in Calumet, the first
step in determining the appropriate venue for judicial review of an EPA
final action is to ascertain whether the action at issue is nationally
applicable or locally or regionally applicable.\7\ If the action is
nationally applicable, judicial review belongs in the D.C. Circuit. If
the action is locally or regionally applicable, then the second step is
to determine whether EPA has appropriately invoked the ``nationwide
scope or effect'' exception to ``override the default rule'' that
judicial review of a locally or regionally applicable action belongs in
the appropriate regional circuit.\8\ The exception applies, and
judicial review of EPA's action belongs in the D.C. Circuit, if EPA
invokes the exception for a final action that is ``based on a
determination of nationwide scope or effect'' and accompanied by an EPA
finding of this basis.\9\ A determination is ``the justification [EPA]
gives for it[s] action, which can be found in its explanation of its
action.'' \10\ A determination has a nationwide scope when it applies
throughout the country as a legal matter, and it has a nationwide
effect when it applies throughout the country as a practical
matter.\11\ Finally, an action is ``based on'' a determination of
nationwide scope or effect when the determination ``lie[s] at the core
of the agency action,'' so as to form the most important part of the
agency's reasoning.\12\ Put another way, an EPA action is based on a
determination of nationwide scope or effect ``only if a justification
of nationwide breadth is the primary explanation for and driver of
EPA's action.'' \13\
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\7\ Calumet, 145 S. Ct. at 1746.
\8\ Id. at 1746.
\9\ Id. at 1749-50.
\10\ Id. at 1750 (internal quotations omitted).
\11\ Id.
\12\ Id. at 1751.
\13\ Id.
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In the August 3, 2026 SRE Decisions Action, EPA is adjudicating SRE
petitions pursuant to the authority granted to the Agency by CAA
section 211(o)(9)(B). Each adjudication is a separate ``action'' for
the purposes of determining venue under CAA section 307(b)(1), and
because each adjudication only applies to a single refinery, each
action is locally or regionally applicable.\14\ However, EPA's
adjudication of the relevant petitions is based on several
determinations of nationwide scope or effect that formed the core basis
for the Agency's decision.
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\14\ Id. at 1748.
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First, these adjudications are based on EPA's determination that
CAA section 211(o)(9) provides EPA with the authority to find that a
small refinery would experience partial DEH if required to comply with
its RFS obligations and to extend a partial exemption. As detailed in
section III.H of the August 3, 2026 SRE Decisions Action, CAA section
211(o)(9)(B) grants EPA authority to temporarily extend the exemption
from RFS obligations to a small refinery that demonstrates
``disproportionate economic hardship,'' but the statute does not define
that phrase or its components, suggesting Congress left it to the
Agency's discretion to ``fill up the details'' when determining how to
implement this provision.\15\ EPA interprets CAA section 211(o)(9)(B),
based on the plain language, structure, and objective of the statute,
to provide the Agency with the authority to find that a small refinery
would experience partial DEH and to extend a partial exemption. This
determination has nationwide scope because it is an interpretation of a
federal statute and CAA section 211(o)(9)(B)(i) by its terms applies
nationwide.\16\ Additionally, this determination has nationwide effect
because it applies generically to all refineries nationwide, regardless
of their geographic location.\17\
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\15\ Loper Bright Enters. v. Raimondo, 603 U.S. 369, 394-95.
\16\ Calumet, 145 S. Ct. at 1752.
\17\ Id.
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Second, these adjudications are based on EPA's determination that
the DOE matrix is a reasonable proxy for DEH, and EPA will defer to
DOE's findings unless EPA's consideration of other economic factors
compels a different result. As detailed in section III.E of the August
3, 2026 SRE Decisions Action, CAA section 211(o)(9)(B) permits a small
refinery to petition for an
[[Page 50534]]
extension of the exemption from its RFS obligations for the reason of
DEH. The statute directs EPA to ``consider the findings of the [2011
DOE study] and other economic factors'' in evaluating a petition but
provides no further instruction as to how to effectuate these
obligations.\18\ As the author of the study and through its work
assessing SRE petitions in conjunction with EPA, DOE has developed
extensive expertise in evaluating economic conditions at U.S.
refineries that is fundamental to the process both DOE and EPA use to
identify whether DEH exists for each petitioner. With limited
exceptions, EPA has consistently relied upon DOE's expertise in the
Agency's adjudication of SRE petitions over the life of the RFS
program. Thus, EPA has determined that the best way to fulfill its
obligation to ``consider the findings of the [2011 DOE study]'' under
CAA section 211(o)(9)(B) is to defer to DOE's application of its matrix
and resulting findings in evaluating whether a small refinery would
experience DEH. EPA has further determined that the best way to fulfill
its obligation to consider ``other economic factors'' is to
independently assess all available information and weigh whether this
information compels EPA to depart from DOE's findings. This
determination has nationwide scope because it is both an interpretation
of a federal statute and CAA section 211(o)(9)(B)(i) by its terms
applies nationwide, and it is a rebuttable presumption that DOE's
finding as to whether a given small refinery would experience DEH,
based on application of the DOE matrix, is correct, unless EPA's
consideration of other economic factors compels it to depart from DOE's
findings. Additionally, this determination has nationwide effect
because it applies generically to all refineries nationwide, regardless
of their geographic location.
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\18\ CAA section 211(o)(9)(B).
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Third, these adjudications are based on EPA's determination that,
when extending the exemption, either wholly or partially, to a small
refinery that has already retired RINs to comply with its RFS
obligations, CAA section 211(o) restricts EPA to returning some or all
of those retired RINs, commensurate with the degree of the exemption.
As detailed in section IV.B of the August 3, 2026 SRE Decisions Action,
returning RINs in this manner effectuates the best reading of the
statute. CAA section 211(o)(5) requires that every instance of RIN
generation be associated with the refining, blending, or importation of
renewable fuel. Section 211(o)(5) also requires that RINs expire after
a certain amount of time, while section 211(o)(9)(B) permits small
refineries to petition for an extension of the exemption ``at any
time.'' EPA interprets these provisions of CAA section 211(o) to limit
EPA to returning RINs retired for compliance, if any, when it grants an
extension of the exemption. This determination has nationwide scope
because it is an interpretation of a federal statute and CAA sections
211(o)(5) and 211(o)(9)(B) by their terms apply nationwide.
Additionally, this determination has nationwide effect because it
applies generically to all refineries nationwide, regardless of their
geographic location.
This third determination also minimizes disruptions to the RIN
market and RFS program, akin to the Fifth Circuit's review of the April
2022 Alternative Compliance Action \19\ in Wynnewood Refining Co., LLC
v. EPA, 86 F.4th 1114 (5th Cir. 2023). In Wynnewood, the Fifth Circuit
concluded that the ACA was based on a determination of nationwide scope
or effect because the ACA was designed to mitigate the impact of the
collective denials from the April 2022 SRE Denial Action \20\ on the
RIN market.\21\ After denying 36 SRE petitions for the 2018 compliance
year, EPA estimated that the small refineries would need to retire an
additional 1.4 billion RINs to satisfy their 2018 compliance
obligations.\22\ Concerned that such a drastic spike in need for RINs
would threaten the viability of the RIN market, EPA issued the ACA,
which required that the small refineries file a revised compliance
report but did not require them to retire additional RINs.\23\ The
Fifth Circuit reasoned that, because the purpose of the ACA was to
address the continuing viability of the RFS program as a whole, it was
based on a determination of nationwide scope or effect.\24\ Similarly
here, EPA's determination that the only permissible means of
implementing the extension of the exemption is by returning retired
RINs is based on concerns about the integrity of the RFS program as a
whole. As explained in section IV.B of the August 3, 2026 SRE Decisions
Action and in the August 2025 SRE Decisions Action, were the Agency to
replace the retired RINs with current vintage RINs, the sudden mass
influx of new RINs would result in decreased RIN prices, leading to
decreased future investments in renewable fuel production and
threatening the stability of the RIN market nationwide. EPA's approach
of returning retired RINs is designed to avoid these negative impacts
to the RFS program. Following the reasoning from the Wynnewood
decision, because the purpose of this determination is to address the
continuing viability of the RFS program as a whole, it is a
determination of nationwide scope or effect.
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\19\ EPA. (Apr. 2022). April 2022 Alternative RFS Compliance
Demonstration Approach for Certain Small Refineries. EPA-420-R-22-
006. (``ACA'').
\20\ EPA. (Apr. 2022). April 2022 Denial of Petitions for RFS
Small Refinery Exemptions. EPA-420-R-22-006.
\21\ Wynnewood Refining Co., LLC v. EPA, 86 F.4th 1114, 1119
(5th Cir. 2023).
\22\ Id. at 1119-20.
\23\ Id. at 1117, 1120.
\24\ Id. at 1120.
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The actions discussed within the August 3, 2026 SRE Decisions
Action are based on the three determinations outlined above, as these
determinations lie ``at the core of the agency action[s]'' so as to
form the most important part of EPA's reasoning.\25\ The first and
second determinations together form the core basis for EPA's
adjudications because the Agency has used both of them to create a
rebuttable presumption that application of the DOE matrix produces the
correct DEH finding, and EPA defers to that finding unless the Agency's
consideration of other economic factors, including refinery-specific
information, compels the Agency to depart from that rebuttable
presumption. EPA's first determination is the first element of EPA's
rebuttable presumption: because the DOE matrix can result in a finding
of full DEH, partial DEH, or no DEH, EPA must first determine that the
CAA provides the Agency with authority for finding partial DEH before
the Agency can consider deferring to those findings. EPA's second
determination is the second element of EPA's rebuttable presumption:
the DOE matrix is a reasonable proxy for determining whether a small
refinery would experience DEH, and deferring to that finding is the
best way of fulfilling the Agency's statutory obligation to ``consider
the [2011 DOE Study]'' and will result in the correct DEH finding for
that small refinery. Taken together, these two determinations--that EPA
has the authority to find that a small refinery is experiencing partial
DEH and that the DOE matrix is a reasonable proxy for determining
whether a small refinery would experience DEH--form the rebuttable
presumption that is ``the primary explanation for and driver of EPA's
action.'' \26\ Under this rebuttable presumption, EPA will defer to
DOE's findings unless the Agency's
[[Page 50535]]
consideration of other economic factors compels a different result.
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\25\ Calumet, 145 S. Ct. at 1751.
\26\ Id.
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To fulfill its statutory obligation to consider ``other economic
factors,'' EPA did consider refinery-specific information in its
adjudications. However, these confirmatory reviews were not the primary
drivers of EPA's actions on these petitions. EPA considered refinery-
specific facts only to determine whether to depart from its rebuttable
presumption that application of DOE's matrix results in the correct DEH
finding, and these considerations, for each small refinery, confirmed
that none of the refinery-specific facts rebutted the presumptive
disposition. For example, EPA considered information presented by small
refineries regarding their financial circumstances and found that the
information was already considered in the DOE matrix or did not
otherwise justify departing from the finding reached by application of
the DOE matrix. Thus, EPA's consideration of refinery-specific facts
was peripheral in comparison to EPA's rebuttable presumption that
application of the DOE matrix is the best means of determining whether
DEH exists.\27\ Notably, EPA's confirmatory review of refinery-specific
facts did not change the final decision for any of the SRE petitions.
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\27\ Id. at 1752.
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Additionally, EPA's third determination--that the only permissible
way to implement the extension of the exemption from RFS obligations
when a small refinery has retired RINs for compliance is to return
those retired RINs--is a core driver of EPA's actions because EPA's
adjudication of SRE petitions necessarily includes extending the
exemption to meritorious petitioners. But how EPA effectuates that
extension of the exemption can look different depending on whether the
relevant small refinery has already demonstrated compliance with its
relevant RFS obligations by retiring RINs. Generally, the RFS statutory
and regulatory provisions require all obligated parties to comply with
their RFS obligations. However, CAA section 211(o)(9)(B) provides an
exception when a small refinery demonstrates that it would experience
DEH. In other words, when EPA grants an exemption to a small refinery,
that small refinery is not required to retire any RINs to demonstrate
compliance if it is a full exemption, and only the number of RINs
necessary to meet half of its RFS obligation if it is a partial
exemption. However, simply granting a petition does not necessarily
effectuate the exemption in all cases. If the exemption is granted
prior to a compliance demonstration by the small refinery, then the
exemption is self-implementing. But if the small refinery has already
demonstrated compliance by retiring RINs, EPA needs to take an
additional step to effectuate the exemption. For the reasons outlined
in sections IV.B and V of the August 3, 2026 SRE Decisions Action, EPA
has determined, consistent with its interpretation of the Agency's
authority under CAA section 211(o) and its policy interest in treating
all refineries that receive an exemption equally, that returning the
retired RINs is the only permissible way of implementing the exemption
where a small refinery has previously demonstrated compliance with its
RFS obligations by retiring RINs. EPA's adjudications are based on this
determination because extending the exemption to meritorious
petitioners is necessarily a part of EPA's action on the SRE petitions
and EPA's statutory interpretation and policy considerations inform its
implementation of the exemption for all petitioners.
For the reasons discussed above, EPA finds that the final actions
discussed within the August 3, 2026 SRE Decisions Action are based on
determinations of nationwide scope or effect for purposes of CAA
section 307(b)(1) and is publishing that finding in the Federal
Register. Under section 307(b)(1) of the CAA, petitions for judicial
review of these actions must be filed in the D.C. Circuit by October 5,
2026.
Aaron Szabo,
Assistant Administrator, Office of Air and Radiation.
[FR Doc. 2026-15905 Filed 8-4-26; 8:45 am]
BILLING CODE 6560-50-P
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