EPA Tells Court It Has ‘Developed a New Approach’ for Reviewing SREs

by Erin Krueger (SAF Magazine) The U.S. EPA announced it has “developed a new approach” for reviewing small refinery exemptions (SREs) in a document filed with the U.S. Court of Appeals for the Tenth Circuit on Aug. 19. The agency is expected to issue decisions on outstanding SRE petitions soon.

The announcement was made in a status report filed with the court related to a lawsuit filed by REH Company LLC in September 2024 challenging the EPA’s denial of Sinclair Wyoming Refining Co. LLC’s petitions for a SRE from its 2018 Renewable Fuel Standard blending obligation.

In the status report, the EPA said it “has now developed a new approach for reviewing small refinery exemptions and that the EPA’s current intention is to issue decisions on the small refinery exemption petitions before it, as well as those that are in litigation, including the exemption petition underlying the denial in this case.”

The U.S. Department of Energy is tasked with analyzing and scoring SRE petitions. The EPA makes the final determination to approve or deny the petition. Under statute, the EPA is required to act on SRE petitions within 90 days of receipt. The agency, however, has a long history of failing to meet that 90-day deadline.

The SRE program has been subject to numerous lawsuits, including those currently in progress. The EPA has also attempted to implement several SRE policy changes over the years, including a change to tweak the standard for “disproportionate economic hardship.” The agency also previously stated its intent to reallocate any waived RFS volumes but has struggled to implement that change.

Data on the DOE’s SRE scoring is not publicly available, but in 2019 the agency confirmed at least one instance where the EPA approved and SRE petition despite DOE analysis that determined the refinery faced no disproportionate economic hardship due to compliance with its RFS obligations.

Data on SRE petitions and decisions was also shrouded in mystery for many years, which made it nearly impossible to determine what impact the SRE program had on RFS blending obligations. Former EPA Administrator Andrew Wheeler in mid-2018 announced plans to create an SRE data dashboard that included information on the number of SRE petitions filed, approved, denied and withdrawn, along with the combined impact of approved SREs on RFS renewable volume obligations (RVOs). The agency officially launched the dashboard soon after Wheeler’s announcement and in mid-2022 also began publishing data on the parties submitting SRE petitions, along with information on facility location and RFS compliance year.

There are currently 195 SRE petitions pending with the EPA spanning RFS compliance years 2017 through 2025.

Current EPA Administrator Lee Zeldin in May told members of the House Appropriations Committee that the agency is working as quickly as it can to take action on the backlog of SRE petitions. Zeldin, however, was unable to offer a specific date the agency is targeting for issuing decisions on the outstanding SRE petitions. READ MORE

Excerpt from DTN Progressive Farmer: The Trump administration could make an announcement perhaps this week on how it will handle the 195 pending small-refinery exemptions to the Renewable Fuel Standard, according to a report from Bloomberg on Tuesday, citing unnamed sources.

developed a new approach for reviewing small-refinery exemptions and that EPA's current intention is to issue decisions on the small-refinery exemption petitions before it, as well as those that are in litigation, including the exemption petition underlying the denial in this case," the EPA said in a court filing on Aug. 19, 2025.

"EPA will update the court on any effect the anticipated new decisions may have on the present litigation."

The U.S. ethanol industry has expressed concern that if the SREs are not handled properly by the agency that the ethanol market could suffer.

According to the EPA's small-refinery exemption dashboard, the pending exemptions cover 2016 to 2025. That includes two pending in 2016 and one in 2017. There are 38 pending from 2018; 29 from 2019; 30 from 2020; 20 each in 2021 and 2023; 28 from 2024 and 8 requested in 2025.

In the latest RFS volumes proposal released in June, the Trump administration offered an evaluation of where things stand on SREs.

EPA said the total volumes requirements remain the same regardless of SREs but the percentage obligations for non-exempt obligated parties increase when SREs are granted. So, the volume obligations would be achieved by fewer obligated parties.

"There is currently significant uncertainty regarding the number of small-refinery exemption petitions that could be granted for 2026 and 2027," the agency said in the proposal.

"We have yet to take further action on these petitions and are still determining how we will evaluate and decide those petitions, which would then inform how we would evaluate and decide any SRE petitions received for 2026 and 2027. We expect to communicate our policy regarding SRE petitions going forward before finalization of this rule."

EPA provides a range of potential gallons exempted for 2026 and 2027 from what it says are about 34 qualifying and operational small refineries that produce about 18 billion gallons of gasoline and diesel. To qualify for exemptions, the RFS requires small refineries to show disproportionate harm from having to meet their obligations. READ MORE