Proposed Rule2026-21155
Renewable Fuel Standard (RFS) Program: Reallocation of Additional 2025 Small Refinery Exemptions
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
October 16, 2026
Issuing agencies
Environmental Protection Agency
Abstract
The U.S. Environmental Protection Agency (EPA) is co-proposing two approaches to revising the existing 2026 and 2027 small refinery exemption (SRE) reallocation volumes under the Renewable Fuel Standard (RFS) program in response to a higher volume of 2025 SREs than previously projected when the Agency set the renewable fuel volumes and percentage standards on April 1, 2026. One approach would reallocate the additional 2025 SRE volume equally between the 2026 and 2027 SRE reallocation volumes, while the other approach would reallocate all the additional 2025 SRE volume to the 2027 SRE reallocation volume. Additionally, given the proposed revision to the 2026 standards, this proposed action may extend the existing 2026 compliance reporting deadline of March 31, 2027.
Full Text
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<title>Federal Register, Volume 91 Issue 199 (Friday, October 16, 2026)</title>
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[Federal Register Volume 91, Number 199 (Friday, October 16, 2026)]
[Proposed Rules]
[Pages 65699-65711]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-21155]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Parts 80 and 1090
[EPA-HQ-OAR-2024-0505; FRL-11947.2-01-OAR]
RIN 2060-AX09
Renewable Fuel Standard (RFS) Program: Reallocation of Additional
2025 Small Refinery Exemptions
AGENCY: Environmental Protection Agency (EPA).
ACTION: Proposed rule.
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SUMMARY: The U.S. Environmental Protection Agency (EPA) is co-proposing
two approaches to revising the existing 2026 and 2027 small refinery
exemption (SRE) reallocation volumes under the Renewable Fuel Standard
(RFS) program in response to a higher volume of 2025 SREs than
previously projected when the Agency set the renewable fuel volumes and
percentage standards on April 1, 2026. One approach would reallocate
the additional 2025 SRE volume equally between the 2026 and 2027 SRE
reallocation volumes, while the other approach would reallocate all the
additional 2025 SRE volume to the 2027 SRE reallocation volume.
Additionally, given the proposed revision to the 2026 standards, this
proposed action may extend the existing 2026 compliance reporting
deadline of March 31, 2027.
DATES:
Comments. Comments must be received on or before December 4, 2026.
Public hearing. The EPA will hold a virtual public hearing on
November 4, 2026. Please refer to the SUPPLEMENTARY INFORMATION section
for additional information on the public hearing.
ADDRESSES:
Comments. Submit your comments, identified by Docket ID No. EPA-HQ-
OAR-2024-0505, at <a href="http://www.regulations.gov">http://www.regulations.gov</a>. Follow the online
instructions for submitting comments. Once submitted, comments cannot
be edited or removed from the docket. The EPA may publish any comment
received to the Agency's public docket. Do not submit to the EPA's
docket at <a href="https://www.regulations.gov">https://www.regulations.gov</a> any information
[[Page 65700]]
you consider to be Confidential Business Information (CBI) or other
information the disclosure of which is restricted by statute.
Multimedia submissions (audio, video, etc.) must be accompanied by a
written comment. The written comment is considered the official comment
and should include discussion of all points you wish to make. The EPA
will generally not consider comments or comment contents located
outside of the primary submission (i.e., on the web, cloud, or other
file sharing system). Please visit <a href="https://www.epa.gov/dockets/commenting-epa-dockets">https://www.epa.gov/dockets/commenting-epa-dockets</a> for additional submission methods, the full EPA
public comment policy, information about CBI or multimedia submissions,
and general guidance on making effective comments.
Public hearing. The virtual public hearing will be held on November
4, 2026. The hearing will begin at 9:00 a.m. Eastern Standard Time
(EST) and end when all parties who wish to speak have had an
opportunity to do so. All hearing attendees (including those who do not
intend to provide testimony) should register for the virtual public
hearing by October 28, 2026. Information on how to register can be
found at <a href="https://www.epa.gov/renewable-fuel-standard/proposed-reallocation-additional-2025-small-refinery-exemptions">https://www.epa.gov/renewable-fuel-standard/proposed-reallocation-additional-2025-small-refinery-exemptions</a>. Additional
information regarding the hearing appears below under SUPPLEMENTARY
INFORMATION.
FOR FURTHER INFORMATION CONTACT: For information about this proposed
rule, contact Dallas Burkholder, Assessment and Standards Division,
Office of Transportation and Air Quality, Environmental Protection
Agency, 2000 Traverwood Drive, Ann Arbor, MI 48105; telephone number:
734-214-4766; email address: <a href="/cdn-cgi/l/email-protection#b8eafeeb95eacdd4ddd5d9d3d1d6dfcbf8ddc8d996dfd7ce"><span class="__cf_email__" data-cfemail="b5e7f3e698e7c0d9d0d8d4dedcdbd2c6f5d0c5d49bd2dac3">[email protected]</span></a>. For questions
regarding the public hearing, contact Nick Parsons at <a href="/cdn-cgi/l/email-protection#095b4f5a24416c687b60676e496c7968276e667f"><span class="__cf_email__" data-cfemail="f8aabeabd5b09d998a91969fb89d8899d69f978e">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
Does this action apply to me?
Entities potentially affected by this action are those involved
with the production, distribution, and sale of transportation fuels
(e.g., gasoline and diesel fuel) and renewable fuels (e.g., ethanol,
biodiesel, renewable diesel, and biogas). Potentially affected
categories include:
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Examples of
Category NAICS * codes potentially affected
entities
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Industry..................... 111110 Soybean farming.
Industry..................... 111150 Corn farming.
Industry..................... 112111 Cattle farming or
ranching.
Industry..................... 112210 Swine, hog, and pig
farming.
Industry..................... 211130 Natural gas liquids
extraction and
fractionation.
Industry..................... 221210 Natural gas
production and
distribution.
Industry..................... 324110 Petroleum refineries
(including
importers).
Industry..................... 325120 Biogases, industrial
(i.e., compressed,
liquefied, solid),
manufacturing.
Industry..................... 325193 Ethyl alcohol
manufacturing.
Industry..................... 325199 Other basic organic
chemical
manufacturing.
Industry..................... 424690 Chemical and allied
products merchant
wholesalers.
Industry..................... 424710 Petroleum bulk
stations and
terminals.
Industry..................... 424720 Petroleum and
petroleum products
wholesalers.
Industry..................... 457210 Fuel dealers.
Industry..................... 562212 Landfills.
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* North American Industry Classification System (NAICS).
This table is not intended to be exhaustive but rather provides a
guide for readers regarding entities potentially affected by this
action. This table lists the types of entities that the EPA is
currently aware could potentially be affected by this action. Other
types of entities not listed in the table could also be affected. To
determine whether your entity would be affected by this action, you
should carefully examine the applicability criteria in 40 CFR parts 80
and 1090. If you have any questions regarding the applicability of this
action to a particular entity, consult the person listed in the FOR
FURTHER INFORMATION CONTACT section.
Participation in Virtual Public Hearing
Information on how to register for the virtual public hearing can
be found at <a href="https://www.epa.gov/renewable-fuel-standard/proposed-reallocation-additional-2025-small-refinery-exemptions">https://www.epa.gov/renewable-fuel-standard/proposed-reallocation-additional-2025-small-refinery-exemptions</a>. The last day to
pre-register to speak at the hearing is October 28, 2026. Please note
that any updates made to any aspect of the hearing will be posted
online at <a href="https://www.epa.gov/renewable-fuel-standard/proposed-reallocation-additional-2025-small-refinery-exemptions">https://www.epa.gov/renewable-fuel-standard/proposed-reallocation-additional-2025-small-refinery-exemptions</a>. While the EPA
expects the hearing to go forward as set forth above, please monitor
the website or contact the person listed in the FOR FURTHER INFORMATION
CONTACT section to determine if there are any updates. The EPA does not
intend to publish a document in the Federal Register announcing
updates.
Subject to the number of signups and time constraints, the EPA
intends that each participant will have three minutes to provide oral
testimony. The EPA may ask clarifying questions during the oral
presentations but will not respond to the presentations at that time.
Written statements and supporting information submitted during the
comment period will be considered with the same weight as oral comments
and supporting information presented at the public hearing.
If you require the services of a translator or special
accommodations such as audio description, please pre-register for the
hearing and describe your needs by October 28, 2026. The EPA may not be
able to arrange accommodations without advance notice.
Preamble Acronyms and Abbreviations
Throughout this document, the use of ``we,'' ``us,'' or ``our'' is
intended to refer to the EPA. We use multiple acronyms and terms in
this preamble. While this list may not be exhaustive, to ease the
reading of this preamble and for reference purposes, the EPA defines
the following terms and acronyms here:
AEO Annual Energy Outlook
BBD Biomass-based diesel
CAA Clean Air Act
RFS Renewable Fuel Standard
RIN Renewable Identification Number
RVO Renewable Volume Obligation
SRE Small refinery exemption
Outline of This Preamble
I. Executive Summary
II. Background and Policy Rationale
III. Legal Justification
[[Page 65701]]
A. Legal Authority for SRE Reallocation Volumes
B. Considerations in Revising Established SRE Reallocation
Volumes and for Timing of This Action
IV. Co-Proposed Revised SRE Reallocation Volumes
V. Co-Proposed Revised Percentage Standards
VI. Statutory Factor Analysis
VII. Technical Amendments
VIII. Severability
IX. Requests for Comment
X. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory Planning and Review
B. Executive Order 14192: Unleashing Prosperity Through
Deregulation
C. Paperwork Reduction Act (PRA)
D. Regulatory Flexibility Act (RFA)
E. Unfunded Mandates Reform Act (UMRA)
F. Executive Order 13132: Federalism
G. Executive Order 13175: Consultation and Coordination With
Indian Tribal Governments
H. Executive Order 13045: Protection of Children From
Environmental Health Risks and Safety Risks
I. Executive Order 13211: Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use
J. National Technology Transfer and Advancement Act (NTTAA) and
1 CFR Part 51
XI. Statutory Authority
I. Executive Summary
On April 1, 2026, the EPA established the renewable fuel volumes
and percentage standards under the RFS program that apply to obligated
parties for the 2026 and 2027 compliance years (``Set 2 Rule'').\1\ In
that final rule, the EPA reallocated a portion (70 percent) of the SREs
granted or projected to be granted for 2023-2025 by including a ``SRE
reallocation volume'' term in the equations used to calculate the RFS
percentage standards under 40 CFR 80.1405. For the 2025 compliance
year, the EPA projected that SREs would result in an exempted Renewable
Volume Obligation (RVO) of 990 million Renewable Identification Numbers
(RINs),\2\ resulting in the inclusion of approximately 700 million RINs
in the 2027 SRE reallocation volume.\3\
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\1\ 91 FR 16388 (Apr. 1, 2026).
\2\ The EPA refers to these 990 million RINs as the ``projected
2025 exempted RVO'' throughout this preamble.
\3\ The 2027 SRE reallocation volume also included an additional
340 million RINs attributable to half of the reallocated 2024
exempted RVO, for a total 2027 SRE reallocation volume of 1.04
billion RINs.
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On August 31, 2026, the EPA issued decisions on 34 SRE petitions
under the RFS program for the 2025 compliance year after consulting
with the U.S. Department of Energy (DOE) and considering relevant
information pursuant to Clean Air Act (CAA) section 211(o)(9).\4\ The
2025 SREs granted in that action resulted in a 2025 exempted RVO of
1.76 billion RINs,\5\ which is 770 million RINs greater than the volume
projected in the Set 2 Rule.\6\ In this action, the EPA is proposing
two options for revising the SRE reallocation volumes promulgated in
the Set 2 Rule to reallocate an additional 770 million RINs as a result
of this significant increase in the actual 2025 exempted RVO as
compared to the projected 2025 exempted RVO. This additional SRE
reallocation volume represents complete (100 percent) reallocation of
the additional 2025 exempted RVO (i.e., the volume beyond the 990
million RINs originally projected for 2025) and aims to prevent the
significantly higher-than-projected volume of 2025 SREs from reducing
demand for renewable fuel and RINs in 2026 and 2027 to levels lower
than anticipated in the Set 2 Rule.
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\4\ U.S. Environmental Protection Agency. (August 31, 2026).
August 31, 2026 Decisions on Petitions for RFS Small Refinery
Exemptions. EPA-420-R-26-017.
\5\ The EPA refers to these 1.76 billion RINs as the ``actual
2025 exempted RVO'' throughout this preamble.
\6\ The EPA refers to these 770 million RINs as the ``additional
2025 exempted RVO'' throughout this preamble.
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This proposal describes the EPA's legal basis for considering the
2025 SREs when proposing to revise the 2026 and 2027 SRE reallocation
volumes, the revised SRE reallocation volumes the Agency is co-
proposing for 2026 and 2027, how the statutory factors were considered,
and the methodology used to calculate the co-proposed revised
percentage standards for 2026 and 2027. Specifically, the EPA is co-
proposing two approaches: (1) reallocate the additional 2025 exempted
RVO equally between the 2026 and 2027 compliance years; and,
alternatively, (2) reallocate all the additional 2025 exempted RVO to
the 2027 compliance year.
Finally, the EPA notes that because the Agency is proposing to
revise the existing 2026 and 2027 RFS standards under 40 CFR
80.1405(a), this proposed rule triggers the automatic compliance
reporting deadline extension provisions under 40 CFR
80.1451(f)(1)(i)(C). For the 2026 compliance year, the current
compliance reporting deadline is March 31, 2027. As a result of this
proposed rule, and per the RFS regulations, the 2026 compliance
reporting deadline will be extended to whichever of the following dates
is applicable:
<bullet> If the EPA finalizes the proposed revision to the 2026 RFS
standards, the next quarterly reporting deadline after the date the
revised 2026 RFS standards become effective.
<bullet> If the EPA withdraws the proposed revision to the 2026 RFS
standards, the next quarterly reporting deadline that is 60 days after
the date of the Agency's withdrawal of the proposed revision to the
2026 RFS standards is published in the Federal Register.
<bullet> If the EPA does not finalize or withdraw the proposed
revision to the 2026 RFS standards within 12 months of the date of
publication of this proposed rule in the Federal Register, the next
quarterly reporting deadline that is 12 months after the date this
proposed rule is published in the Federal Register.
For the 2027 compliance year, there is currently no established
compliance reporting deadline because the EPA has not yet established
the 2028 RFS standards.\7\ Furthermore, the earliest the 2027
compliance reporting deadline could be is March 31, 2028, which is more
than 16 months after this proposal.\8\ Thus, this proposed rule is not
expected to have any impact on the 2027 compliance reporting deadline.
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\7\ Under 40 CFR 80.1451(f)(1)(i)(A)(2), the compliance
reporting deadline for a given compliance year is not established
until the subsequent compliance year's standards become effective in
40 CFR 80.1405(a).
\8\ 40 CFR 80.1451(f)(1)(i)(A).
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II. Background and Policy Rationale
In the Set 2 Rule, the EPA established applicable volumes for 2026
and 2027 based on an analysis of the statutory factors and a review of
implementation of the RFS program to date.\9\ In doing so, the EPA
determined both the volume requirements, which were intended to be met
with renewable fuel produced and used in 2026 and 2027, and SRE
reallocation volumes, which were intended to be met with carryover RINs
attributable to the 2023-2025 SREs.\10\
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\9\ 91 FR 16388, 16425 (Apr. 1, 2026).
\10\ 91 FR 16388, 16433 (Apr. 1, 2026).
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The 2026 and 2027 SRE reallocation volumes established in the Set 2
Rule accounted for a portion of the actual 2023 and 2024 exempted RVOs
that resulted from the SRE decisions issued by the EPA in August 2025
\11\ and November 2025,\12\ as well as a portion of the projected 2025
exempted RVO.\13\ The SRE reallocation volumes correspond to three
statutory categories
[[Page 65702]]
of renewable fuel (advanced biofuel, biomass-based diesel (BBD), and
total renewable fuel), such that there are three SRE reallocation
volumes for each year.\14\ As discussed in the Set 2 Rule and
elsewhere, the EPA at the time faced an unusually high backlog of
pending SRE petitions for multiple compliance years resulting in an
unusually material impact on overall volumes.\15\
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\11\ U.S. Environmental Protection Agency. (August 2025). August
2025 Decisions on Petitions for RFS Small Refinery Exemptions. EPA-
420-R-25-010.
\12\ U.S. Environmental Protection Agency. (November 2025).
November 2025 Decisions on Petitions for RFS Small Refinery
Exemptions. EPA-420-R-25-013.
\13\ The EPA's rationale for creating the SRE reallocation
volumes can be found in the Set 2 Rule. 91 FR 16388, 16435-40 (Apr.
1, 2026).
\14\ The EPA did not establish SRE reallocation volumes for
cellulosic biofuel for the reasons discussed in the Set 2 Rule. 91
FR 16388, 16437-38 (Apr. 1, 2026).
\15\ 91 FR 16388, 16436 (Apr. 1, 2026).
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At the time of the Set 2 Rule, the EPA had issued decisions on the
2023 and 2024 SRE petitions, but not the 2025 SRE petitions. Consistent
with the approach that the EPA first advanced in the 2020 RFS Rule (in
which the Agency projected future exempted fuel volumes),\16\ in the
Set 2 Rule the Agency projected 7.55 billion gallons of exempted fuel
volume in 2025 using a three-year average of the actual exempted fuel
volumes from 2022-2024. This projected exempted fuel volume equaled a
projected 2025 exempted RVO of 990 million RINs. The EPA reallocated 70
percent of this volume (approximately 700 million RINs) as part of the
2027 SRE reallocation volume.\17\
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\16\ 85 FR 7016, 7051-53 (Feb. 6, 2020) (``2020 RFS Rule'').
Note that while the EPA projected exempted fuel volumes in the 2020
RFS Rule, the Agency later revised the 2020 percentage standards via
rulemaking, including adjusting the projection of exempted volume
from SREs. 87 FR 39600 (July 1, 2022).
\17\ The 2027 SRE reallocation volume also included an
additional 340 million RINs, attributable to half of the reallocated
2024 exempted RVO, for a total 2027 SRE reallocation volume of 1.04
billion RINs.
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On August 31, 2026, the EPA issued decisions on 34 SRE petitions
for the 2025 compliance year after consulting with DOE and considering
relevant information,\18\ in which the Agency granted full (100
percent) exemptions to 18 petitions, granted partial (50 percent)
exemptions to 11 petitions, denied three petitions, and determined two
petitions to be ineligible.\19\ The 2025 SREs resulted in a 2025
exempted fuel volume of 13.38 billion gallons, which, using the
previously established percentage standards for 2025, equaled an actual
2025 exempted RVO of 1.76 billion RINs.\20\ This is 770 million RINs
greater than the projected 2025 exempted RVO of 990 million RINs in the
Set 2 Rule.\21\
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\18\ The EPA refers to these SRE petition decisions as the
``2025 SREs'' throughout this preamble.
\19\ U.S. Environmental Protection Agency. (August 31, 2026).
August 31, 2026 Decisions on Petitions for RFS Small Refinery
Exemptions. EPA-420-R-26-017.
\20\ The EPA used estimated gasoline and diesel production
volumes from 2025 SRE petitions to estimate the actual 2025 exempted
RVO. Reported 2025 exempted fuel volumes will not be available until
after the 2025 compliance reporting deadline of October 1, 2026. The
EPA intends to use reported 2025 compliance data, as well as
incorporate any additional 2025 SRE decisions issued after this
proposed rule, in the final rule establishing the revised SRE
reallocation volumes.
\21\ 91 FR 16388, 16439 (Apr. 1, 2026).
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In this action, the EPA is co-proposing to revise the 2026 and 2027
SRE reallocation volumes to reallocate an additional 770 million RINs,
which is 100 percent of the additional 2025 exempted RVO beyond the
projected 2025 exempted RVO in the Set 2 Rule.\22\ The actual 2025
exempted RVO was significantly higher than the volume projected by the
EPA in the Set 2 Rule, resulting in an increased number of RINs
available for obligated parties to use for compliance with their 2025
or future RFS obligations. These RINs represent renewable fuel produced
and used in 2025 that exempt small refineries no longer need to retire
for compliance because of their relieved obligations due to SREs. The
availability of these RINs--and the ability for obligated parties to
use them to comply with their RFS obligations in lieu of RINs generated
for renewable fuel produced and used in 2026 and 2027--could reduce RIN
prices and demand for renewable fuel and RINs in future years and may
ultimately result in the market failing to produce the volume of
renewable fuel anticipated by the volume requirements in the Set 2
Rule.
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\22\ The exact co-proposed revised SRE reallocation volumes are
described in section IV of this preamble.
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The additional 2025 exempted RVO would have impacts on the RIN
market. For the 2025 compliance year, the number of RINs that need to
be retired to meet the 2025 RFS obligations is 770 million RINs fewer
than the EPA projected in the Set 2 Rule. While these additional RINs
have no impact on the volume of renewable fuel actually produced and
used in 2025 since that year is in the past, they directly increase the
supply of RINs available for other obligated parties to use for
compliance. As a result, obligated parties will be able to use the RFS
program's carryover RIN provisions to roll these RINs forward to the
2026 compliance year and beyond.\23\
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\23\ CAA section 211(o)(5) requires that the EPA establish a
credit program as part of the Agency's RFS regulations and that the
credits be valid for obligated parties to show compliance for 12
months after the date of generation. 42 U.S.C. 7545(o)(5). The EPA
implemented this requirement through the use of RINs, which can be
used to demonstrate compliance for the year in which they are
generated and the subsequent compliance year. Obligated parties can
obtain more RINs than needed in a given compliance year, allowing
them to carry over these RINs for use in the subsequent compliance
year, although the RFS regulations limit the use of these carryover
RINs to 20 percent of the obligated party's RVO. For the total
number of available carryover RINs to be preserved from one year to
the next, individual carryover RINs are used for compliance before
they expire and are replaced with newer vintage RINs that are then
held for use in the next year. For example, 2025 carryover RINs must
be used for compliance in 2026 or they will expire. However, the use
of 2025 RINs to meet up to 20 percent of an obligated party's 2026
RVO increases the number of 2026 RINs that can then be carried over
for use in 2027.
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The EPA expects that there may be impacts from the increased number
of carryover RINs as a result of the additional 2025 exempted RVO on
renewable fuel production and use in 2026 and, more acutely, in 2027.
Obligated parties could choose to use these additional carryover RINs
to comply with their 2026 and 2027 RFS obligations in lieu of acquiring
renewable fuel produced in those years, thereby reducing the demand for
renewable fuel production and use in those years. Thus, failure to
mitigate the market impacts of the increased number of carryover RINs
due to the additional 2025 exempted RVO could result in decreased
demand for renewable fuel produced in 2026 and 2027. This magnitude of
carryover RINs has the potential to depress RIN prices and decrease
demand for renewable fuel in future years.
While significant quantities of carryover RINs can negatively
impact the production and use of renewable fuel, carryover RINs also
play an important role in providing a liquid and well-functioning RIN
market, as the EPA has stated on multiple occasions.\24\ The continued
success of the RFS program depends on the RIN market. Carryover RINs
provide obligated parties compliance flexibility for substantial
uncertainties in the transportation fuel marketplace.
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\24\ See, e.g., 91 FR 16388, 16436 (Apr. 1, 2026); see also,
e.g., 90 FR 25784, 25827 (June 17, 2025); 88 FR 44468, 44494 (July
12, 2023); 87 FR 39600, 39613 (July 1, 2022); 85 FR 7016, 7021 (Feb.
6, 2020); 83 FR 63704, 63708-10 (Dec. 11, 2018); 82 FR 58486, 58493-
95 (Dec. 12, 2017); 81 FR 89746, 89754-55 (Dec. 12, 2016); 80 FR
77420, 77482-87 (Dec. 14, 2015).
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The EPA is co-proposing two approaches to reallocate the additional
2025 exempted RVO. Under the first approach, the EPA would reallocate
the additional 2025 exempted RVO in equal amounts to both the 2026 and
2027 SRE reallocation volumes.\25\ This approach would result in
revised 2026 and 2027 SRE reallocation volumes of similar magnitudes.
In the Set 2 Rule, the EPA established 2026 and 2027 SRE
[[Page 65703]]
reallocation volumes of 0.99 and 1.04 billion RINs, respectively. Under
the equal reallocation approach, the 2026 and 2027 SRE reallocation
volumes would each be increased by equal amounts, such that the SRE
reallocation volume in each year would be approximately 1.4 billion
RINs. Given the timing of this proposed rule, this approach would
require obligated parties to acquire additional RINs for the 2026
compliance year after the compliance year was over.
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\25\ The EPA refers to this approach as the ``equal reallocation
approach'' throughout this preamble.
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Under the second approach, the EPA would reallocate all the
additional 2025 exempted RVO to the 2027 SRE reallocation volume, as
opposed to equally between 2026 and 2027.\26\ This approach is
consistent with the approach to SRE reallocation volumes in the Set 2
Rule, in which all the projected 2025 exempted RVO was reallocated to
the 2027 SRE reallocation volume, and would ensure that all the
reallocated volumes from 2025 SREs were reallocated to the same
compliance year. Under the 2027 reallocation approach, the 2026 SRE
reallocation volume would remain at 0.99 billion RINs, while the 2027
SRE reallocation volume would increase from 1.04 billion to 1.81
billion RINs. Reallocating all the additional 2025 exempted RVO to 2027
would provide obligated parties with additional time to prospectively
adjust their compliance strategies given the increase in the 2027 SRE
reallocation volume, rather than requiring obligated parties to acquire
additional RINs after the compliance year was over. It would also allow
the obligated parties to recover the cost of the revised 2027 SRE
reallocation volume through the revenue received from the sale of
obligated fuels (i.e., gasoline and diesel), further limiting the
impact on obligated parties.
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\26\ The EPA refers to this approach as the ``2027 reallocation
approach'' throughout this preamble.
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The EPA is proposing to fully reallocate 100 percent of the
additional 2025 exempted RVO because this approach would align with
market expectations from the Set 2 Rule and minimize disruptions in the
market as a result of the 2025 SREs. At the time the EPA promulgated
the Set 2 Rule, market participants relied on the volumes promulgated
in that action to inform compliance strategies, including for the 2026
and 2027 volume requirements, which require the use of specified
quantities of renewable fuel in 2026 and 2027. Subsequent to the
promulgation of the Set 2 Rule, the significantly higher-than-projected
volume of 2025 SREs disrupted those expectations. Without additional
action by the EPA, the additional 2025 exempted RVO could jeopardize
the realization of the 2026 and 2027 volume requirements in the market.
As described in the Set 2 Rule, the EPA designed the SRE reallocation
volumes as a mechanism to require the use of RINs associated with 2023-
2025 SREs, removing the ability for obligated parties to use those RINs
to comply with their RFS obligations in lieu of RINs generated for
renewable fuel produced and used in 2026 and 2027. Absent the SRE
reallocation volumes, these RINs could reduce RIN demand and RIN prices
and may ultimately result in the market failing to produce the volume
of renewable fuel anticipated by the 2026 and 2027 volume
requirements.\27\ The EPA is therefore proposing to remedy that
disruption through the required retirement of the 770 million RINs
associated with the additional 2025 exempted RVO. This increases the
likelihood that the 2026 and 2027 volume requirements would be realized
in the market through new renewable fuel production and use rather than
through the use of carryover RINs attributable to the 2025 SREs. The
EPA recognizes that this approach is different from the approach to SRE
reallocation volumes in the Set 2 Rule but the Agency is proposing that
such change is justified for the reasons articulated in this preamble.
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\27\ 91 FR 16388, 16436 (Apr. 1, 2026).
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As noted in section IX of this preamble, the EPA is requesting
comment on whether the additional SRE reallocation volumes should be
different between 2026 and 2027, such as whether more or less of the
additional 2025 exempted RVO should be reallocated in 2026 or 2027 (C-
1).
III. Legal Justification
In this action, the EPA is co-proposing two approaches to revise
the 2026 and 2027 SRE reallocation volumes established in the Set 2
Rule. In doing so, the EPA is proposing to use the same authority under
CAA section 211(o)(2)(B)(ii) that was used to establish the original
2026 and 2027 SRE reallocation volumes in the Set 2 Rule.\28\ This
section discusses that authority, as well as the EPA's authority to
reconsider and revise previously established standards under the RFS
program. Alternatively, the EPA may have authority under CAA section
211(o)(2)(A)(i) and (iii)(I) to ``ensure'' that the volumes in the Set
2 Rule are met in the market with actual renewable fuel production and
use in 2026 and 2027 via a compliance mechanism.\29\ The purpose of
reallocating the additional 2025 exempted RVO is to prevent excess
carryover RINs introduced by the 2025 SREs granted after the Set 2 Rule
was finalized from removing the market incentives for actual production
and use of renewable fuels in 2026 and 2027 at the volumes anticipated
by the Set 2 Rule. As noted in section IX of this preamble, the EPA is
requesting comment on the Agency's legal authority to reallocate the
additional 2025 exempted RVO (C-2), including under CAA section
211(o)(2)(A)(i).
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\28\ 42 U.S.C. 7545(o)(2)(B)(ii).
\29\ 42 U.S.C. 7545(o)(2)(A)(i), (iii)(I).
---------------------------------------------------------------------------
A. Legal Authority for SRE Reallocation Volumes
As in the Set 2 Rule, the EPA is co-proposing to revise the 2026
and 2027 SRE reallocation volumes utilizing the ``set authority'' in
CAA section 211(o)(2)(B)(ii), which directs the Agency to ``set,'' or
establish, applicable volumes of renewable fuel for use as
transportation fuel in the U.S. for years after those specified in the
statutory tables. Under that provision, the Administrator shall, in
coordination with the Secretary of Agriculture and Secretary of Energy,
determine the applicable volume of each renewable fuel category based
on a review of implementation of the RFS program and an analysis of
statutory factors. Congress provided the EPA flexibility by enumerating
factors that the Administrator must consider without mandating
particular forms of analysis or specifying how the Administrator must
weigh the various factors against one another. Thus, as the CAA ``does
not state what weight should be accorded to the relevant factors,'' it
``give[s] EPA considerable discretion to weigh and balance the various
factors required by statute.'' \30\ There are also prescriptive
requirements for specific fuel categories in CAA section
211(o)(2)(B)(iii)-(v).
---------------------------------------------------------------------------
\30\ Ctr. for Biological Diversity v. EPA, 141 F.4th 153, 171
(D.C. Cir. 2025) (``CBD''); Sinclair Wyo. Refin. Co. LLC v. EPA, 101
F.4th 871, 887 (D.C. Cir. 2024); see also Brown v. Watt, 668 F.2d
1290, 1317 (D.C. Cir. 1981) (``A balancing of factors is not the
same as treating all factors equally. The obligation instead is to
look at all factors and then balance the results. The Act does not
mandate any particular balance, but vests the [agency] with
discretion to weigh the elements . . . .'').
---------------------------------------------------------------------------
The EPA is proposing to use this authority to consider the 2025
SREs and revise the existing SRE reallocation volumes to incorporate
the additional 2025 exempted RVO. In discussing the statutory
conditions in CAA section 211(o)(2)(B)(iii) and (v) in the Set 2 Rule,
the EPA assessed the total applicable volumes, including the 2026 and
2027 SRE reallocation volumes.
[[Page 65704]]
Because this proposed rule would increase the SRE reallocation volumes
for individual renewable fuel categories in proportionate amounts
(i.e., a proportionate increase in the BBD, advanced biofuel, and total
renewable fuel standards), the EPA points to the discussion of these
conditions in the Set 2 Rule, which all remain applicable to the
Agency's proposed action here.\31\
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\31\ 91 FR 16388, 16395-96 (Apr. 1, 2026).
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B. Considerations in Revising Established SRE Reallocation Volumes and
for Timing of This Action
The EPA generally has authority to reconsider and revise the
Agency's rulemakings, unless provided otherwise by statute, so long as
we use the same procedures to amend a rule as we used to promulgate it
in the first instance and set forth good reasons for the
reconsideration.\32\ The EPA's authority to revise RFS standards
specifically is further buttressed by the statutory structure, under
which Congress created a prospective regulatory scheme \33\ that
expressly contemplates the possibility of adjustments based on
unanticipated circumstances.\34\ This understanding of the EPA's
authority is longstanding; the Agency previously revised the 2011,
2013, and 2020 annual rules and has also adjudicated on the merits
numerous petitions to revise other annual rules.\35\ The EPA believes
the power to reconsider, as with the power to promulgate a rule in the
first instance, remains extant even if the rule operates retroactively
or is promulgated after the statutory deadline, so long as the Agency
reasonably considers and mitigates the burdens associated with a
retroactive or delayed rulemaking as described in this section.
---------------------------------------------------------------------------
\32\ FDA v. Wages & White Lion Invs., L.L.C., 604 U.S. 542
(2025), Encino Motorcars, LLC v. Navarro, 579 U. S. 211, 221-222
(2016) (quoting FCC v. Fox Television Stations, Inc., 556 U. S. 502,
515 (2009)), Motor Vehicle Mfrs. Ass'n of United States, Inc. v.
State Farm Mut. Auto. Ins. Co., 463 U. S. 29, 43 (1983).
\33\ See, e.g., CAA section 211(o)(2)(B)(ii), 42 U.S.C.
7545(o)(2)(B)(ii) (requirement for the EPA to determine applicable
volumes 14 months in advance); see also CAA section 211(o)(2)(B)(i),
42 U.S.C. 7545(o)(2)(B)(i) (statutory volume table prospectively
determined by Congress); CAA section 211(o)(3)(B), 42 U.S.C.
7545(o)(3)(B) (requirement for the EPA to prospectively establish
renewable fuel standards for the following year by November 30 of
the prior year). While these provisions are no longer applicable,
they demonstrate the prospective nature of the RFS program.
\34\ CAA section 211(o)(7), 42 U.S.C. 7545(o)(7).
\35\ See, e.g., U.S. Environmental Protection Agency. (January
17, 2017). Denial of AFPM Petition for Waiver of 2016 Cellulosic
Biofuel Standard. See also 80 FR 77420 (Dec. 14, 2015) (final rule
rescinding the 2011 cellulosic biofuel standard for utilizing
methodology invalidated by the court); 79 FR 25025 (May 2, 2014)
(direct final rule adjusting the 2013 cellulosic biofuel applicable
volume and percentage standard after the compliance year was over);
77 FR 70752 (Nov. 27, 2012) (notice of denial of requests for a
waiver of the RFS standards for 2012-2013).
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The 2026 and 2027 SRE reallocation volumes, established under CAA
section 211(o)(2)(B)(ii) as a component of the applicable volumes for
2026 and 2027, are similar to the revisions to the volume requirements
promulgated in the EPA's prior actions. CAA section 211(o)(2)(B)(i)
contains the statutory volumes, which can then be modified using the
EPA's waiver authorities. Likewise, CAA section 211(o)(2)(B)(ii)
requires the EPA to set volumes after 2022, which can also be modified
using the Agency's waiver authorities and reconsidered, as appropriate,
to the extent justified by relevant factors.\36\
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\36\ See, e.g., 91 FR 16388, 16397 (Apr. 1, 2026) and 88 FR
44468, 44479 (July 12, 2023).
---------------------------------------------------------------------------
The Agency acknowledges that reconsideration can negatively impact
regulatory certainty and disrupt market expectations created by
previously promulgated standards. This may especially be the case if
the effects of reconsideration are retroactive, and such retroactive
rules must consider and mitigate burdens on obligated parties, as
discussed further below. Moreover, in the Set 2 Rule, the EPA expressly
stated that the Agency did not intend, at that time, to revisit that
rulemaking and subsequently adjust the standards.\37\ Although the EPA
expects that any reliance interests obligated parties had in the
percentage standards from the Set 2 Rule would be outweighed by the
considerations informing this proposal (i.e., the proposed attempt to
maintain the volumes from the Set 2 Rule in light of the recent 2025
SREs), as noted in section IX of this preamble, the Agency is
requesting comment on reliance interests to better inform our decision-
making on this topic (C-3).
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\37\ 91 FR 16388, 16441 (Apr. 1, 2026) (``We note, however, that
we do not plan to revise the percentage standards for 2026 and 2027
to account for any subsequent changes to our approach to evaluating
SRE petitions or other inaccuracies in the projection of exempt
volumes of gasoline and diesel.'').
---------------------------------------------------------------------------
At the same time, reconsideration can also address the impacts of
unexpected actions and market disruptions that occur after the
standards have been set and that, if not accounted for, could lead to
reduced demand for renewable fuel. In this action, the EPA is co-
proposing to revise the 2026 and 2027 SRE reallocation volumes in
response to an unanticipated event--the significantly higher-than-
projected volume of 2025 SREs--that has occurred since the promulgation
of the Set 2 Rule and that could have direct and significant impacts on
the fuels market. The EPA believes this event has created an unusual
situation in which retroactive reconsideration and revision of the 2026
and 2027 SRE reallocation volumes are warranted.
In the Set 2 Rule, the EPA attempted to account for the exempted
RVOs associated with 2023-2025 SREs through the establishment of SRE
reallocation volumes, which included a projection of the 2025 exempted
RVO that was reallocated to the 2027 compliance year. The projected
2025 exempted RVO, however, fell short of the actual 2025 exempted RVO
by a sizeable margin. As described in section II of this preamble, the
significantly higher-than-projected volume of 2025 SREs resulted in an
additional 770 million RINs becoming available for compliance with the
2025 and later compliance years. Consistent with the EPA's
justification for establishing the 2026 and 2027 SRE reallocation
volumes in the Set 2 Rule, these excess RINs could result in decreased
demand in future years for RINs and renewable fuel, as well as
decreased RIN prices, and may ultimately result in the market failing
to produce the volume of renewable fuel anticipated by the volume
requirements established in the Set 2 Rule. This is because, through
the use of the RFS program's carryover RIN provisions, the additional
2025 exempted RVO would allow obligated parties to effectively use an
additional 770 million RINs from the 2025 compliance year to comply
with their 2026 and 2027 RFS obligations in lieu of RINs generated for
renewable fuel produced and used in 2026 and 2027.
The EPA recognizes that in co-proposing to revise the 2026 and 2027
SRE reallocation volumes, the Agency is doing so after the statutory
deadlines for the 2026 and 2027 standards of October 31, 2024, and
October 31, 2025, respectively.\38\ The EPA also recognizes that if
this rule is finalized in 2026, it will be partially retroactive for
the 2026 compliance year, and if it is finalized in 2027, it will be
fully retroactive for the 2026 compliance year and partially
retroactive for the 2027 compliance year. Additionally, barring unusual
circumstances, the EPA believes it is generally appropriate to avoid
reconsidering and revising previously finalized RFS standards.\39\
Nonetheless, the EPA is proposing to do so for 2026 and 2027 because
the Agency has determined that unanticipated events have occurred that
affect fuel markets
[[Page 65705]]
and consequently affect renewable fuel demand. The EPA additionally
finds that the burden of such a standard is materially mitigated by the
fact that the Agency intends for the co-proposed revised SRE
reallocation volumes to be met using carryover RINs attributable to the
2025 SREs, which will be available in greater numbers than anticipated
when the Agency established the 2026 and 2027 standards due to the
significantly higher-than-projected volume of 2025 SREs.
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\38\ CAA section 211(o)(2)(B)(ii), 42 U.S.C. 7545(o)(2)(B)(ii).
\39\ See 87 FR 39600, 39619 (July 1, 2022).
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The U.S. Court of Appeals for the D.C. Circuit held that the EPA
retains authority to promulgate volumes and annual standards beyond the
statutory deadlines, even those that apply retroactively, so long as
the Agency exercises our authority ``reasonably.'' \40\ In doing so,
the EPA must balance the burden on obligated parties of a delayed
rulemaking with the broader goal of the RFS program to increase
renewable fuel use.\41\ The D.C. Circuit noted reasonableness includes
``whether obligated parties had adequate lead time and access to a
sufficient number of RINs to comply with the delayed requirement.''
\42\ In upholding the EPA's late and retroactive standards in ACE, the
D.C. Circuit considered several specific factors, including the
availability of RINs for compliance, the amount of lead time and
adequate notice for obligated parties, and the availability of
compliance flexibilities.\43\ In addressing rulemakings that were late
(i.e., those issued after the statutory deadline) but not retroactive,
the D.C. Circuit emphasized the amount of lead time and adequate notice
for obligated parties.\44\ In 2015, the EPA established the BBD volume
requirements for 2014-2017 and missed the statutory deadline--that the
Agency establish an applicable volume target for BBD no later than 14
months before the first year to which that volume requirement will
apply--for all four years.\45\ The D.C. Circuit found that the EPA
properly balanced the relevant considerations and had provided
sufficient notice to parties in establishing the applicable volume
requirements for 2014-2017.\46\ The D.C. Circuit, in a later case,
noted its repeated holdings that the ``EPA may promulgate late, and
even retroactive, volume requirements so long as it `reasonably
considers and mitigates any hardship caused to obligated parties by
reason of the lateness.' '' \47\ In so holding, the D.C. Circuit noted
the EPA's explanation of the achievability of the RFS standards, the
timing of compliance demonstrations in relation to the final rule, and
existing flexibilities in the RFS program for obligated parties.\48\
---------------------------------------------------------------------------
\40\ Ams. for Clean Energy v. EPA, 864 F.3d 691 (D.C. Cir. 2017)
(``ACE'') (the EPA may issue late applicable volumes under CAA
section 211(o)(2)(B)(ii)); Monroe Energy, LLC v. EPA, 750 F.3d 909
(D.C. Cir. 2014); NPRA v. EPA, 630 F.3d 145, 154-58 (D.C. Cir.
2010).
\41\ NPRA, 630 F.3d at 164-65.
\42\ ACE, 864 F.3d at 718.
\43\ Id. at 721-22.
\44\ Id.
\45\ CAA section 211(o)(2)(B)(ii), 42 U.S.C. 7545(o)(2)(B)(ii).
\46\ ACE, 864 F.3d at 721-23.
\47\ CBD, 141 F.4th at 184.
\48\ Id.
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As described in section I of this preamble, this action triggers
the automatic compliance reporting deadline extension provisions under
40 CFR 80.1451(f)(1)(i)(C). For the 2026 compliance year, obligated
parties will have at least five months after this proposed rule is
published in the Federal Register before they have to demonstrate
compliance with their 2026 RFS obligations by the current 2026
compliance reporting deadline of March 31, 2027, and could have
additional time for compliance (e.g., until June 1, 2027) depending on
when the EPA finalizes any of these proposed changes. While the 2027
compliance reporting deadline will not be determined until the EPA
establishes the 2028 RFS standards, the deadline can be no earlier than
March 31, 2028, which is over 16 months after this proposal.\49\ This
proposed rule also provides notice to obligated parties that their RFS
obligations for 2026 and 2027 may be increasing. It is possible that
the revised 2026 and 2027 SRE reallocation volumes will be partly or
fully retroactive, depending on the timing of the final rulemaking and
the approach that the EPA finalizes. Under either approach, there are
concerns with notice and potential retroactive effects if this rule is
finalized in 2027, though obligated parties are on notice in advance of
2027 for the potential adjustments to the 2027 SRE reallocation volume
under either co-proposed approach. If the equal reallocation approach
is adopted, notice for the revised 2026 SRE reallocation volume would
primarily amount to this proposed rule, provided in late 2026.\50\ The
EPA will endeavor to work quickly to minimize retroactive effects of
this action and will also consider these issues in determining the
Agency's final approach.
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\49\ 40 CFR 80.1451(f)(1)(i)(A).
\50\ The EPA notes, however, that additional notice was provided
by the press release issued on August 31, 2026, indicating the
Agency's intention to issue this proposed rule. U.S. Environmental
Protection Agency. (August 31, 2026). EPA Announces Action on 2025
Small Refinery Exemptions and Related Actions. <a href="https://www.epa.gov/newsreleases/epa-announces-action-2025-small-refinery-exemptions-and-related-actions">https://www.epa.gov/newsreleases/epa-announces-action-2025-small-refinery-exemptions-and-related-actions</a>.
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RIN acquisition to comply with revised 2026 standards would likely
occur late in the compliance year, or even after the compliance year is
over, resulting in obligated parties retroactively adjusting compliance
strategies as compared to the 2027 reallocation approach. Under the
2027 reallocation approach, an increased obligation in 2027 only would
give obligated parties notice of the revised 2027 standards prior to
the 2027 compliance year so that those parties would have advanced
notice of their increased obligations and limit the retroactive effects
of the revised 2027 SRE reallocation volume.
Because the EPA anticipates that the 770 million RINs associated
with the additional 2025 exempted RVO will be available in the market
as carryover RINs, obligated parties should be able to acquire the
necessary RINs prior to demonstrating compliance with their 2026 and
2027 RFS obligations. The EPA anticipates that additional information
will be available at the time of the final rulemaking; the Agency plans
to further assess the feasibility and market impacts of the revised SRE
reallocation volumes at that time. While this proposed rule would
require a drawdown in the number of carryover RINs available,
additional carryover RINs should remain available for obligated parties
given the EPA's prior action in the Set 2 Rule to reallocate less than
the full amount of the 2023-2025 exempted RVOs. Additionally, obligated
parties would continue to have the ability to use existing compliance
flexibilities to comply with the revised SRE reallocation volumes,
including carrying forward a deficit from one compliance year into the
next.
IV. Co-Proposed Revised SRE Reallocation Volumes
As described in section II of this preamble, the EPA is co-
proposing two approaches to revise the 2026 and 2027 SRE reallocation
volumes. Both approaches would increase the total 2026 and 2027 SRE
reallocation volumes by 770 million RINs, which is equivalent to 100
percent of the additional 2025 exempted RVO beyond the projected 2025
exempted RVO of 990 million RINs from the Set 2 Rule. Under the equal
reallocation approach, the additional 770 million RINs would be
reallocated equally between the 2026 and 2027 compliance years. Under
the 2027 reallocation approach, the additional 770 million RINs would
be reallocated only to the 2027 compliance year, and no changes would
be made to
[[Page 65706]]
the 2026 RFS standards. The resulting co-proposed revised SRE
reallocation volumes, as well as the existing SRE reallocation volumes,
are shown in Table IV-1.
Table IV-1--Co-Proposed Revised SRE Reallocation Volumes
[Billion RINs]
----------------------------------------------------------------------------------------------------------------
Set 2 Rule Equal reallocation 2027 reallocation
-------------------------------------------------------------------------
2026 2027 2026 2027 2026 2027
----------------------------------------------------------------------------------------------------------------
Biomass-based diesel.................. 0.21 0.25 0.30 0.34 0.21 0.43
Advanced biofuel...................... 0.28 0.34 0.40 0.47 0.28 0.59
-------------------------------------------------------------------------
Total renewable fuel.............. 0.99 1.04 1.37 1.43 0.99 1.81
----------------------------------------------------------------------------------------------------------------
Note: All volumes are rounded to the nearest 10 million RINs. To avoid overestimating, volumes ending in five
were rounded down for 2026 and rounded up for 2027.
The EPA is not reopening the analyses supporting the 2026 and 2027
SRE reallocation volumes established in the Set 2 Rule, which the
Agency established prospectively as a mechanism to preserve the
stringency of the 2026 and 2027 volume requirements. The 2026 and 2027
SRE reallocation volumes promulgated in the Set 2 Rule continue to be
fully justified by the decisions in that action and represented the
EPA's understanding of the proper SRE reallocation volumes in light of
the information before the Agency at that time. The updated analysis
provided here in support of the proposed revision represents a
supplemental analysis to the determinations made in the Set 2 Rule that
the EPA is not reopening. In this action, the EPA is proposing to
revise the 2026 and 2027 SRE reallocation volumes by increasing the SRE
reallocation volumes to account for the 2025 SREs as reflected in Table
IV-1. The EPA requests that commenters limit their input to whether
this is the appropriate response considering the 2025 SREs, and refrain
from commenting on other aspects of the Set 2 Rule, including the
renewable fuel volume requirements promulgated therein or other final
actions in that rulemaking.
V. Co-Proposed Revised Percentage Standards
The obligated parties to which the percentage standards apply are
producers and importers of gasoline and diesel, as defined by 40 CFR
80.2. Each obligated party multiplies the percentage standards by the
sum of all non-renewable gasoline and diesel they produce or import to
determine their RVOs.\51\ The RVOs are the number of RINs that the
obligated party is responsible for procuring and retiring to
demonstrate compliance with the applicable standards for that year.
Since there are four categories of renewable fuel under the RFS
program, there are likewise four RVOs applicable to each obligated
party for each year. As described in section IV of this preamble, the
EPA is proposing to revise the 2026 and 2027 SRE reallocation volumes.
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\51\ 40 CFR 80.1407.
---------------------------------------------------------------------------
The formulas used to calculate the percentage standards for the
2026 and 2027 compliance years applicable to obligated parties are
provided in 40 CFR 80.1405(c). The EPA used the same values from the
Set 2 Rule for the variables in these formulas other than the SRE
reallocation volume (SRERV) to calculate the co-proposed revised
percentage standards for 2026 and 2027 for both the equal reallocation
and 2027 reallocation approaches. The resultant percentage standards
under both co-proposals, as well as the original percentage standards
in the Set 2 Rule, are shown in Table V-1.\52\ These percentage
standards are included in the proposed regulations at 40 CFR 80.1405(a)
and would apply to producers and importers of gasoline and diesel.\53\
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\52\ The calculation of the co-proposed revised percentage
standards is presented in ``Calculation of Co-Proposed Revised 2026
and 2027 RFS Percentage Standards,'' available in the docket for
this action.
\53\ The amendatory instructions for the proposed regulations
associated with this action, including both the equal reallocation
and 2027 reallocation approaches, are provided in ``Proposed
Regulations for Reallocation of Additional 2025 Small Refinery
Exemptions Rule,'' available in the docket for this action.
Table V-1--Co-Proposed Revised Percentage Standards for 2026 and 2027
----------------------------------------------------------------------------------------------------------------
Set 2 Rule (%) Equal reallocation (%) 2027 reallocation (%)
-------------------------------------------------------------------------
2026 2027 2026 2027 2026 2027
----------------------------------------------------------------------------------------------------------------
Biomass-based diesel.................. 5.24 5.37 5.29 5.43 5.24 5.48
Advanced biofuel...................... 6.42 6.61 6.48 6.69 6.42 6.76
-------------------------------------------------------------------------
Total renewable fuel.............. 15.50 15.78 15.71 16.01 15.50 16.23
----------------------------------------------------------------------------------------------------------------
VI. Statutory Factor Analysis
The EPA considered the statutory factors specified in CAA section
211(o)(2)(B)(ii) in establishing the renewable fuel volumes and
percentage standards for 2025 in the Set 1 Rule \54\ and for 2026 and
2027 in the Set 2 Rule. In light of the significantly higher-than-
projected volume of 2025 SREs, the purpose of this proposed rule is to
account for the difference between the projected 2025 exempted RVO in
the Set 2 Rule and the actual 2025 exempted RVO. Absent this action,
the significantly higher-than-projected volume of 2025 SREs could
significantly increase the number of carryover RINs available for use
in 2026 and 2027,
[[Page 65707]]
which could in turn reduce RIN prices and demand for RINs and renewable
fuel in those years. This could also affect some of the statutory
factors, including the expected annual rate of future commercial
production of renewable fuels, as discussed further below.
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\54\ 88 FR 44468 (July 12, 2023) (``Set 1 Rule'').
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The EPA acknowledges that neither this action nor the 2025 SREs
will affect the volume of renewable fuel produced or consumed in the
U.S. in 2025, and that any effect these decisions may have on renewable
fuel production and use in 2026 is limited. Instead, the significantly
higher-than-projected volume of 2025 SREs will result in fewer RINs
being retired for compliance in 2025 and, all else being equal, a
higher number of carryover RINs being available for use in 2026 and
future years. Increased numbers of carryover RINs can negatively impact
the demand for RINs and renewable fuel. This is because obligated
parties can use carryover RINs to meet their compliance obligations in
2026 and 2027 in lieu of acquiring RINs generated for renewable fuel
produced and used in these years. An increase in the availability of
carryover RINs to meet obligated parties' 2026 and 2027 RFS obligations
could decrease the demand for current-year RINs. The co-proposed
revised SRE reallocation volumes are intended to prevent increased
numbers of carryover RINs from decreasing demand for renewable fuel
below the volumes established for 2026 and 2027 in the Set 2 Rule.
The EPA is co-proposing revised 2026 and 2027 SRE reallocation
volumes as part of setting overall RFS applicable volumes pursuant to
the Agency's authority in CAA section 211(o)(2)(B)(ii). As discussed in
section III.A of this preamble, the CAA requires that renewable fuel
volumes established using this authority are based on a review of
implementation of the program and an analysis of statutory factors.
The EPA is considering the significantly higher-than-projected
volume of 2025 SREs under the Agency's directive to review the
implementation of the program. These exemptions have a direct impact on
the RFS obligations both for the exempted small refineries (which now
have reduced or zero RFS obligations) and for all obligated parties in
aggregate (which can now carry over a greater number of carryover RINs
into the 2026 and later compliance years). Further, because obligated
parties can now use the carryover RINs that otherwise would have been
retired for compliance but for the 2025 SREs, exemptions granted in one
year can have an impact on the demand for RINs and renewable fuel in
future years.
The EPA has also considered the statutory factors specified in CAA
section 211(o)(2)(B)(ii) in co-proposing the revised 2026 and 2027 SRE
reallocation volumes. The EPA projects that the portion of the RFS
obligations represented by the co-proposed revised SRE reallocation
volumes would be met with carryover RINs attributable to the 2025 SREs.
The EPA therefore does not expect that this action will increase the
production and use of renewable fuel beyond the volumes previously
established for 2026 and 2027 (24.02 billion RINs and 24.46 billion
RINs, respectively). Conversely, if the EPA does not account for the
additional 2025 exempted RVO, the increase in available carryover RINs
resulting from the 2025 SREs could result in lower commercial
production of renewable fuel in 2026 and 2027 than intended when
establishing the required volumes for these years in the Set 2 Rule.
In general, the statutory factors that the EPA must consider when
establishing the applicable volumes for years after 2022 are impacted
by the production and use of renewable fuel and are not impacted by the
use of carryover RINs. Increased production of renewable fuel is
expected to have impacts on ``air quality, climate change, conversion
of wetlands, ecosystems, wildlife habitat, water quality, and water
supply,'' ``energy security,'' ``infrastructure,'' ``job creation, the
price and supply of agricultural commodities, rural economic
development, and food prices,'' among other factors.\55\ The use of
carryover RINs to satisfy RFS obligations is not expected to impact
these factors. Given this proposed rule's purpose in maintaining the
volumes established for 2026 and 2027 in the Set 2 Rule, the EPA has
also considered the impact on the expected annual rate of future
commercial production of renewable fuels.\56\ The EPA intends that this
proposed rule, if finalized, would not result in an impact on the
expected annual rate of future commercial production of renewable fuels
in 2026 and 2027.
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\55\ 42 U.S.C. 7545(o)(2)(B)(ii).
\56\ In developing this action, the EPA also considered the
statutory factors that are impacted by the production of renewable
fuel. See U.S. Environmental Protection Agency. (March 2026).
Renewable Fuel Standard (RFS) Program: Standards for 2026 and 2027,
Partial Waiver of the 2025 Cellulosic Biofuel Volume Requirement,
and Other Changes: Regulatory Impact Analysis. EPA-420-R-26-011
(``Set 2 Rule RIA'').
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This proposed rule is intended to account for the anticipated
market impacts of the additional 2025 exempted RVO rather than to
propose changes that would result in higher (or lower) volumes of
renewable fuel than previously established for 2026 and 2027. In the
Set 2 Rule, the EPA analyzed the impact of the volume requirements for
2026 and 2027 in relation to the No RFS Baseline.\57\ The EPA believes
this analysis remains proper, as this proposed rule seeks to maintain
the production and use of renewable fuel volumes in the Set 2 Rule. The
EPA has therefore largely not revised the Agency's analysis of the
impact of the renewable fuel volumes for 2026 and 2027 on the statutory
factors presented in the Set 2 Rule and the Set 2 Rule RIA, as we do
not project that this proposed rule would result in renewable fuel
production and use in 2026 and 2027 that differs materially from the
volumes previously analyzed.
---------------------------------------------------------------------------
\57\ The No RFS Baseline is the EPA's projection of the quantity
of renewable fuel that would be used in the absence of the RFS
volume requirements. For more information on the EPA's projection of
the No RFS Baseline for 2026 and 2027, see Chapter 2 of the Set 2
Rule RIA.
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The co-proposed revised SRE reallocation volumes would result in
higher percentage standards for obligated parties than would otherwise
be the case, which in turn would require obligated parties to acquire
greater quantities of RINs to retire for compliance. The EPA projects
that, in aggregate, obligated parties would acquire these additional
RINs by purchasing carryover RINs from other parties rather than
blending additional quantities of renewable fuel. Because the EPA does
not expect this action to result in an increase in the production and
use of renewable fuel, the Agency does not anticipate impacts on most
statutory factors.
The one statutory factor that the EPA does project would be
impacted by this proposed rule is the impact of the use of renewable
fuels on the cost to consumers of transportation fuel and on the cost
to transport goods. The EPA does expect that, on average at the
national level, obligated parties would likely pass on the costs of
purchasing these additional RINs to consumers, and that this proposed
rule could increase the cost of transportation fuel to consumers. The
EPA's assessment of the impacts of this proposed rule on fuel prices
are shown in Table VI-1.\58\ The EPA has updated the RIN prices in this
analysis to use average RIN prices for the most recent six months for
which
[[Page 65708]]
data were available (March 2026-August 2026), which reflects the higher
market prices for RINs since the release of the Set 2 Rule. For both
sets of co-proposed percentage standards, the impact of the proposed
revised SRE reallocation volumes is projected to increase the price of
gasoline and diesel by less than one cent per gallon relative to the
projected price impact of the existing 2026 and 2027 RFS standards.
---------------------------------------------------------------------------
\58\ More detail on the fuel price estimates can be found in
``Fuel Price Impacts for Reallocation of Additional 2025 Small
Refinery Exemptions Proposed Rule,'' available in the docket for
this action.
Table VI-1--Estimated Effect of the Co-Proposed Revised Percentage Standards for 2026 and 2027 on Retail Fuel
Prices Relative to the No RFS Baseline
----------------------------------------------------------------------------------------------------------------
Existing RFS standards Equal reallocation 2027 reallocation
-------------------------------------------------------------------------
2026 2027 2026 2027 2026 2027
----------------------------------------------------------------------------------------------------------------
Percentage Standard:
Cellulosic biofuel................ 0.79% 0.84% 0.79% 0.84% 0.79% 0.84%
Biomass-based diesel.............. 5.24% 5.37% 5.29% 5.43% 5.24% 5.48%
Other advanced biofuel............ 0.39% 0.40% 0.40% 0.42% 0.39% 0.44%
Conventional renewable fuel....... 9.08% 9.17% 9.23% 9.32% 9.08% 9.47%
Total RIN Cost ([cent]/gal)........... 27.5[cent] 28.0[cent] 27.9[cent] 28.4[cent] 27.5[cent] 28.8[cent]
Price Impact ([cent]/gal):
Gasoline.......................... 6.8[cent] 7.3[cent] 7.2[cent] 7.6[cent] 6.8[cent] 8.0[cent]
Diesel............................ 18.6[cent] 21.0[cent] 19.0[cent] 21.4[cent] 18.6[cent] 21.8[cent]
----------------------------------------------------------------------------------------------------------------
Note: ``Other advanced biofuel'' is not an RFS standard category but is calculated by subtracting the cellulosic
biofuel and BBD standards from the advanced biofuel standard. ``Conventional renewable fuel'' is not an RFS
standard category but is calculated by subtracting the advanced biofuel standard from the total renewable fuel
standard.
In the Set 2 Rule, the EPA determined the appropriate renewable
fuel volume requirements (i.e., the volume of renewable fuel expected
to be produced and used in 2026 and 2027) informed by consideration of
the statutory factors. This action does not modify or reopen those
volumes, which continue to be justified by the analysis in the Set 2
Rule.
VII. Technical Amendments
The EPA is proposing several technical amendments to the fuel
quality and RFS regulations. These amendments are being made to correct
minor inaccuracies in the current regulations. These changes are
described in Table VII-1.
Table VII-1--Miscellaneous Technical Corrections to RFS and Fuel Quality
Regulations
------------------------------------------------------------------------
Part and section of Title 40 Description of revision
------------------------------------------------------------------------
Sec. 80.12................. Correcting a non-substantive typo for
clarity in the title of EPA Compendium
Method TO-15. The incorporation by
reference of this publication in the
regulation was approved by the Director
of the Federal Register as of June 15,
2026.
Sec. Sec. 80.130(b)(1), Correcting typographical, grammatical,
80.135(d)(3)(iii)(E), and and consistency errors.
80.1466(h)(1).
Sec. 80.1426(f)(18)(i)(C).. Correcting a typo in ``the point of
importation'' to be ``upon
importation.''
Sec. 80.1460(d)............ Removing an obsolete violation for a RIN
retention requirement under 40 CFR
80.1428(a)(4), which was removed in the
Set 2 Rule.
Sec. 1090.80............... Correcting the cross-reference in the
definition of ``Certified non-
transportation 15 ppm distillate fuel or
certified NTDF'' from 40 CFR 80.1401 to
40 CFR 80.2.
Sec. 1090.1337(e).......... Correcting the homogeneity requirements
to restore language finalized in the
Fuels Regulatory Streamlining Sampling
and Testing Updates Rule (90 FR 4320,
4360; Jan. 15, 2025) that described the
homogeneity testing parameters for
oxygenate and certified ethanol
denaturant, which was inadvertently
overwritten in the Set 2 Rule amendatory
instructions (91 FR 16388, 16500; Apr.
1, 2026).
------------------------------------------------------------------------
VIII. Severability
If finalized, the EPA intends for the revised 2026 and 2027 SRE
reallocation volumes to be severable from the remainder of the 2026 and
2027 volume requirements. The EPA's justification for each volume is
independent, such that invalidation of the SRE reallocation volumes
would not impact the Agency's estimates of renewable fuel that are
associated with new renewable fuel production in the market in 2026 and
2027. The EPA's justification for the revised SRE reallocation volumes
is independent of that establishing the 2026 and 2027 volume
requirements in the Set 2 Rule, even though the two terms are additive.
The EPA does not believe that it would be appropriate to further delay
implementation of the 2026 and 2027 volume requirements if a court were
to find defects in the revised SRE reallocation volumes.
The EPA also intends for the revised SRE reallocation volumes to be
severable from each of the technical corrections in section VII of this
preamble, as each is independently justified and each function
separately from the others.
IX. Requests for Comment
The EPA is specifically soliciting comments on key aspects of the
proposed rule. To facilitate comment on those portions of the rule, the
EPA has indexed each comment solicitation with a unique identifier
below (e.g., ``C-1'', ``C-2'') to provide a consistent framework for
effective and efficient provision of comments. Accordingly, the EPA
asks that commenters include the corresponding identifier when
providing comments relevant to that comment solicitation. The EPA asks
that commenters include the identifier either in a heading or within
the text of each
[[Page 65709]]
comment to make clear which comment solicitation is being addressed.
The EPA notes that the Agency is not limiting comment to these
identified areas. Specifically, the EPA is requesting comment on the
following:
<bullet> How should the EPA reallocate the additional SRE
reallocation volume between 2026 and 2027 (C-1).
<bullet> The EPA's legal authority to revise the SRE reallocation
volumes to reallocate the additional 2025 exempted RVO (C-2).
<bullet> Any relevant arguments and information, including with
respect to legitimate reliance interests on the Set 2 Rule (C-3) and
possible effects of the reallocation proposals.
X. Statutory and Executive Order Reviews
Additional information about these statutes and Executive Orders
can be found at <a href="https://www.epa.gov/laws-regulations/laws-and-executive-orders">https://www.epa.gov/laws-regulations/laws-and-executive-orders</a>.
A. Executive Order 12866: Regulatory Planning and Review
This action is an economically significant regulatory action that
was submitted to the Office of Management and Budget (OMB) for review.
Any changes made in response to OMB recommendations have been
documented in the docket.
B. Executive Order 14192: Unleashing Prosperity Through Deregulation
This action is expected to be an Executive Order 14192 regulatory
action.
C. Paperwork Reduction Act (PRA)
This action does not impose an information collection burden under
the PRA. OMB has previously approved the information collection
activities related to this proposed rule and has assigned the following
OMB control numbers: 2060-0725, 2060-0740, and 2060-0749. This action
co-proposes revised SRE reallocation volumes and percentage standards
for 2026 and 2027 and does not impose new or different reporting
requirements on regulated parties than already exist for the RFS
program.
D. Regulatory Flexibility Act (RFA)
I certify that this action will not have a significant economic
impact on a substantial number of small entities under the RFA. The
small entities directly regulated by the annual percentage standards
associated with the RFS volumes are small refiners that produce
gasoline or diesel fuel, which are defined at 13 CFR 121.201. The EPA
believes that there are currently six refiners (owning seven
refineries) producing gasoline and/or diesel that meet the definition
of small entity by having 1,500 employees or fewer. To evaluate the
impacts of the co-proposed revised SRE reallocation volumes on small
entities, the EPA has conducted a screening analysis to assess whether
the Agency should make a finding that this action will not have a
significant economic impact on a substantial number of small
entities.\59\
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\59\ ``Regulatory Flexibility Act Screening Analysis for
Reallocation of Additional 2025 Small Refinery Exemptions Proposed
Rule,'' available in the docket for this action.
---------------------------------------------------------------------------
This action does not change the compliance flexibilities currently
offered to small entities under the RFS program and currently available
information shows that the impact on small entities from implementation
of this rule will not be significant. The EPA has reviewed and assessed
the available information, which shows that obligated parties, in
general on a nationwide scale, are able to recover the cost of
acquiring the RINs necessary for compliance with the RFS standards
through higher sales prices of the petroleum products they sell than
would be expected in the absence of the RFS program.\60\ This is true
whether obligated parties acquire RINs by purchasing renewable fuel
with attached RINs or purchasing separated RINs. The costs of the RFS
program are thus being passed on to consumers in a highly competitive
marketplace. Even if the EPA were to assume that the cost of acquiring
RINs was not recovered by obligated parties, a cost-to-sales ratio test
shows that the costs to small entities of the co-proposed revised RFS
standards in this action are less than one percent of the value of
their sales.\61\
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\60\ For a further discussion of the ability of obligated
parties to recover the cost of RINs, see e.g., U.S. Environmental
Protection Agency. (November 2017). Denial of Petitions for
Rulemaking to Change the RFS Point of Obligation. EPA-420-R-17-008.
See also Gerveni, M., Hubbs, T. et al. (2026). The Biofuels
Blueprint: Understanding the U.S. Renewable Fuel Standard. Applied
Economic Perspectives and Policy, 48(3), 565-590. <a href="https://doi.org/10.1002/aepp.70083">https://doi.org/10.1002/aepp.70083</a>. See also CBD at 188, finding that the EPA
properly considered RIN cost passthrough in setting the volume
requirements in the Set 1 Rule, and acknowledging the ``central
premise'' that ``refineries are able to pass RIN costs along to
consumers'' as generally true.
\61\ A cost-to-sales ratio of one percent represents a typical
agency threshold for determining the significance of the economic
impact on small entities. U.S. Environmental Protection Agency.
(November 2006). Final Guidance for EPA Rulewriters: Regulatory
Flexibility Act as amended by the Small Business Regulatory
Enforcement Fairness Act.
---------------------------------------------------------------------------
While the screening analysis described above supports a
certification that this rule will not have a significant economic
impact on small refiners, the EPA continues to believe that it is more
appropriate to consider the 2026 and 2027 standards as a part of the
Agency's ongoing implementation of the overall RFS program. When
considered this way, the impacts of the RFS program as a whole on small
entities were addressed in the RFS2 Rule, which was the rule that
implemented the entire program as required by the Energy Independence
and Security Act (EISA) of 2007.\62\ As such, the Small Business
Regulatory Enforcement Fairness Act (SBREFA) panel process that took
place prior to the RFS2 Rule was also for the entire RFS program and
looked at impacts on small refiners through the full implementation of
the statutory volume targets, which continue to exceed the volumes
proposed in this action.
---------------------------------------------------------------------------
\62\ 75 FR 14670 (Mar. 26, 2010) (``RFS2 Rule'').
---------------------------------------------------------------------------
For the SBREFA process for the RFS2 Rule, the EPA analyzed the
potential impacts of the RFS regulations on small entities. As a part
of this analysis, the EPA convened a Small Business Advocacy Review
(SBAR) Panel (``the Panel''). During the Panel process, the EPA
gathered information and recommendations from Small Entity
Representatives (SERs) on how to reduce the impact of the rule on small
entities, and those comments are detailed in the Final Panel
Report.\63\ The EPA also conducted an analysis of the potential impacts
of the RFS program on all refiners, including small refiners, and found
that the program would not have a significant economic impact on a
substantial number of small entities.\64\ For small refiners subject to
the RFS program, the analysis included a cost-to-sales ratio test, a
ratio of the estimated annualized compliance costs to the value of
sales per company. From this test, the EPA estimated that all directly
regulated small entities would have compliance costs less than one
percent of their sales over the full implementation of the statutory
volume targets.\65\ Furthermore, the EPA conducted a section 610 review
of the RFS program in May 2020, in which the Agency was required to
determine whether the RFS program should continue without change or
should be rescinded or amended, consistent with the stated objectives
of the CAA, to minimize any significant economic impact of the rule
upon a substantial
[[Page 65710]]
number of small entities.\66\ Following a review of relevant evidence,
the EPA did not identify any such potential changes that would reduce
burden on a substantial number of small entities in a manner consistent
with the stated objectives of the CAA or EISA and concluded that no
changes to the RFS program were warranted.\67\
---------------------------------------------------------------------------
\63\ U.S. Environmental Protection Agency. (September 8, 2008).
Final Report of the Small Business Advocacy Review Panel on EPA's
Planned Proposed Rule Regulation of Fuels and Fuel Additives:
Renewable Fuel Standard Program. Docket Item No. EPA-HQ-OAR-2005-
0161-0457.
\64\ 75 FR 14670, 14858-62 (Mar. 26, 2010).
\65\ 75 FR 14670, 14862 (Mar. 26, 2010).
\66\ U.S. Environmental Protection Agency. (May 2020). Results
of EPA's Section 610 Review of the Final Rule for Regulation of
Fuels and Fuel Additives: Changes to Renewable Fuel Standard
Program. Docket Item No. EPA-HQ-OAR-2019-0168-0022.
\67\ Id.
---------------------------------------------------------------------------
The EPA has determined that this action will not impose any
additional requirements on small entities beyond those already
analyzed, since the impacts of this rule are not greater or
fundamentally different than those already considered in the analysis
for the RFS2 Rule assuming full implementation of the statutory volume
targets. While in this action the EPA is co-proposing to revise the
2026 and 2027 SRE reallocation volumes through the Agency's authority
in CAA section 211(o)(2)(B)(ii) rather than reducing the statutory
volumes through our waiver authorities (as was the case through 2022),
the magnitude of the co-proposed revised advanced biofuel and total
renewable fuel applicable volumes in this action nonetheless remain
significantly below the statutory volume targets analyzed in the RFS2
Rule.\68\ Compared to the burden that would be imposed under the
volumes that the EPA assessed in the analysis for the RFS2 Rule (i.e.,
the volumes specified in the CAA), the volumes in this action would
reduce burden on small entities. Regarding the BBD standard, it is a
nested standard within the advanced biofuel category and, as discussed
in the Set 2 Rule, the BBD applicable volumes for 2026 and 2027 are
below the volume of BBD that is anticipated to be produced and used to
satisfy the advanced biofuel and total renewable fuel requirements.\69\
In other words, the volume of BBD actually used in 2026 and 2027 will
be driven not by the 2026 and 2027 BBD standards, but rather by the
2026 and 2027 advanced biofuel and total renewable fuel standards. The
net result of the revised volumes being co-proposed in this action is a
reduction in burden as compared to implementation of the statutory
volume targets assumed in the RFS2 Rule analysis.
---------------------------------------------------------------------------
\68\ The statutory volume targets analyzed in the RFS2 Rule were
21 billion gallons of advanced biofuel and 36 billion gallons of
total renewable fuel.
\69\ 91 FR 16388, 16429 (Apr. 1, 2026).
---------------------------------------------------------------------------
Furthermore, to the degree that small entities may be impacted by
this action, these impacts are mitigated by the existing compliance
flexibilities in the RFS program that are available to small entities,
which the EPA is not proposing to change in this rule. These
flexibilities include being able to comply through RIN trading rather
than renewable fuel blending, 20 percent RIN rollover allowance (i.e.,
up to 20 percent of an obligated party's RVO can be met using previous-
year RINs), and deficit carry-forward (i.e., the ability to carry over
a deficit from a given year into the following year, provided that the
deficit is satisfied together with the next year's RVO). Additionally,
as required by CAA section 211(o)(9)(B), the RFS regulations include a
hardship relief provision that allows for a small refinery to petition
for an extension of its small refinery exemption at any time based on a
showing that the refinery is experiencing a ``disproportionate economic
hardship.'' \70\ The RFS regulations provide the same relief to small
refiners that are not eligible for small refinery relief.\71\ In the
RFS2 Rule, the EPA discussed other potential small entity flexibilities
that had been suggested by the Panel or through comments, but the
Agency did not adopt them, in part because we had serious concerns
regarding our legal authority to do so.\72\
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\70\ 40 CFR 80.1441(e)(2).
\71\ 40 CFR 80.1442(h).
\72\ 75 FR 14670, 14858-62 (Mar. 26, 2010).
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In sum, this rule would not change the compliance flexibilities
currently offered to small entities under the RFS program and available
information shows that the impact on small entities from implementation
of this rule would not be significant. The EPA has therefore concluded
that this action will not have any significant adverse economic impact
on directly regulated small entities.
E. Unfunded Mandates Reform Act (UMRA)
This action does not contain an unfunded mandate of $100 million
(adjusted annually for inflation) or more (in 1995 dollars) as
described in UMRA, 2 U.S.C. 1531-1538, and does not significantly or
uniquely affect small governments.
F. Executive Order 13132: Federalism
This action does not have federalism implications. It will not have
substantial direct effects on the States, on the relationship between
the national government and the States, or on the distribution of power
and responsibilities among the various levels of government.
G. Executive Order 13175: Consultation and Coordination With Indian
Tribal Governments
This action does not have Tribal implications as specified in
Executive Order 13175. This action will be implemented at the Federal
level and affects transportation fuel refiners, blenders, marketers,
distributors, importers, exporters, and renewable fuel producers and
importers. Tribal governments will be affected only to the extent they
produce, purchase, or use regulated fuels. Thus, Executive Order 13175
does not apply to this action.
H. Executive Order 13045: Protection of Children From Environmental
Health Risks and Safety Risks
The EPA interprets Executive Order 13045 as applying only to those
regulatory actions that concern environmental health or safety risks
that the EPA has reason to believe may disproportionately affect
children, per the definition of ``covered regulatory action'' in
section 2-202 of the Executive Order. Therefore, this action is not
subject to Executive Order 13045 because it co-proposes SRE
reallocation volumes and revised percentage standards for 2026 and 2027
and does not concern an environmental health risk or safety risk. Since
this action does not concern human health, the EPA's Policy on
Children's Health also does not apply.
I. Executive Order 13211: Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use
This action is not a ``significant energy action'' because it is
not likely to have a significant adverse effect on the supply,
distribution, or use of energy. This action co-proposes SRE
reallocation volumes and revised percentage standards for 2026 and
2027. The RFS program is designed to achieve positive effects on the
Nation's transportation fuel supply by increasing energy independence
and security.
J. National Technology Transfer and Advancement Act (NTTAA) and 1 CFR
Part 51
This action does not involve technical standards.
XI. Statutory Authority
Statutory authority for this action comes from sections 114, 203-
05, 208, 211, 301, and 307 of the CAA, 42 U.S.C. 7414, 7522-24, 7542,
7545, 7601, and 7607.
[[Page 65711]]
List of Subjects
40 CFR Part 80
Environmental protection, Administrative practice and procedure,
Air pollution control, Diesel fuel, Fuel additives, Gasoline, Imports,
Incorporation by reference, Oil imports, Petroleum, Renewable fuel.
40 CFR Part 1090
Environmental protection, Administrative practice and procedure,
Air pollution control, Diesel fuel, Fuel additives, Gasoline, Imports,
Oil imports, Petroleum, Renewable fuel.
Lee Zeldin,
Administrator.
[FR Doc. 2026-21155 Filed 10-15-26; 8:45 am]
BILLING CODE 6568-60-P
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This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.