| WHAT THE BILL DOES | WHAT THE BILL DOES NOT DO |
|---|---|
| Grants a nationwide 1-psi RVP waiver for E15 so E15 can be offered in the summer fuel season nationwide, subject to applicable fuel quality and retail/terminal constraints. E15 is already offered in other months. | Does not mandate E15 sales or require retailers to offer E15. It provides legal certainty/optionality to sell E15; it does not create a blending or marketing requirement. |
| Changes eligibility from “small refinery facility” to “small refining company” at 75 kbpd so large companies cannot claim “small” status through multiple facilities and skirt the 20-year-old RFS law. | Does not eliminate relief for truly small operators. It preserves a small-company pathway while preventing large, well-capitalized firms from using facility-by-facility eligibility to claim “small” status. |
| Reforms the Small Refinery Exemption program by prohibiting reallocation of exempted volumes starting in compliance year 2028 (prevents waived gallons from going on other refiners’ tabs after the fact). | Does not “increase the Renewable Volume Obligation” by shifting exempted gallons onto other refiners after 2028. This is the opposite of reallocation, removing the mechanism that can spike obligations on non-exempt parties. |
| Provides small refining companies with an automatic 75% exemption starting in 2028 (approx. 480 million RINs) for those that remain under the 75 kbpd company threshold. | Does not create a “free pass” for large refiners. The automatic relief is limited to entities that remain under the small-company definition and are paired with |
A federal legislative solution is needed to ensure increased uniformity across the nation’s fuel supply chain and permanently resolve inconsistent fuel volatility limits.
Refiners will begin manufacturing fuel in February to meet federally required summer gasoline specifications and begin shipping it through pipelines. While temporary emergency waivers can provide short-term relief in some circumstances, these have historically come much too late given the significant lead time required to make and deliver summer gasoline, resulting in market dysfunction.
A federal legislative solution, instead of existing state-by-state petitions, would provide parity between E10 and E15 and avoid the impacts of state-specific and/or regional requirements. Allowing year-round, nationwide sales of E15 would prevent a complicated patchwork of unique state requirements while not impacting the supply of E10.
Reform is needed to address SREs within the current RFS framework to right-size the program to provide relief only to those who actually need it.
The RFS program has been in place for 20 years during which time most refiners have made substantial investments in RFS compliance. Unpredictable granting of SREs and reallocation of RFS obligations distorts the marketplace as competitive fuel price issues arise when one refinery has to comply with the RFS and another refinery does not.
These distortions can be largely remedied by adjusting the definition of which refiners can apply for SREs:
Definition: The current “Small Refinery” facility-based definition of 75,000 barrels per day (bpd) per facility would be replaced with a new company-based definition of a “Small Refining Company” of 75,000 bpd per company.
EPA has stated that small refineries are generally not harmed by complying with the RFS.
EPA analysis determined small entities subject to an RFS obligation (e.g. small refineries) have no net cost resulting from the RFS program, generally recover the cost of acquiring RINs necessary for compliance with the RFS, and the cost of RFS compliance is passed along to consumers.
The current small refinery exemption framework undermines the RFS and causes regulatory and market uncertainty for all obligated parties.
Currently, some small refineries are owned by billion-dollar conglomerates that are benefiting from SREs that are intended for true small refining companies.
There are inconsistencies from some of these refiners who are opposed to this reform who, on one hand, portray “disproportionate economic harm” in their SRE applications, and on the other hand, portray these same facilities as profit centers in public financial statements.
In an October 2025 letter, the Attorneys General of Iowa, Nebraska, and South Dakota highlighted some of these inconsistencies amongst some refiners seeking and receiving SREs.
Granting year-round E15 and reforming SREs are two priorities for most of the refining, biofuel, agriculture, and fuel retail industries because pairing these fixes together would provide more market certainty and bring a more balanced approach to addressing prominent issues for liquid fuels participants.
For both E15 and SREs, the existing laws limit the ability to make necessary changes, and the regulations are subject to very different political approaches in each Administration. Legislation is needed to instill permanency and market certainty.
Legislation would provide regulatory certainty, eliminate questions surrounding potential waivers for E15 and/or E10, and help EPA set the RFS annual volumes in a timely manner without needing to delay or adjust due to the issuance of widespread SREs.
Shrinking SREs would remove a large point of recurring tension amongst refiners, biofuels, agriculture, and fuel retail interests and make the RFS volumes more certain, transparent, and fair.
Ongoing uncertainty with both E15 and SREs presents significant planning challenges for regulated entities. To wit,
The market instability caused by questions about E15 and SRE uncertainty, including last-minute changes well after infrastructure investments were made and fuel was manufactured and shipped, has recently resulted in cost volatility, which puts upward pressure on pricing.
The federal legislative solution would provide certainty, which would help to stabilize the fuels market and allow for greater efficiency.
