HF Sinclair Sues EPA over Biofuel Exemption Delays

July 25, 2026

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by Elizabeth Elkin (Bloomberg News/Transport Topics) Energy company says EPA has delayed decisions on refinery exemptions from blending mandates -- HF Sinclair Corp. is suing the Environmental Protection Agency for continuing to delay a decision on exemptions from mandates requiring refiners to blend renewable fuels into gasoline and diesel.

The EPA is “dragging its feet on a decision it could’ve made months ago,” the company said in a lawsuit filed July 24.

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The U.S. in March rolled out its most aggressive biofuel blending mandates to date after months of delays. Existing federal law allows small refineries to be granted exemptions from the mandates if they demonstrate “disproportionate economic hardship.”

HF Sinclair noted in the lawsuit that compliance credits refiners use to meet their federal blending obligations expire Sept. 1 and that the court previously recognized “the clock is ticking” for petitioners to obtain relief.

The issue over exemptions comes amid a related fight in Congress to pass year-round, nationwide sales of higher-ethanol E15 gasoline. A recent proposal that passed the House of Representatives paired E15 sales with cuts to exemptions from blending mandates. That bill faces steep opposition from some in the Senate, as some refiners have lobbied heavily against it. READ MORE

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HF Sinclair sues EPA for delays on biofuel exemption decision, Bloomberg News reports (Reuters)
Bloomberg News reports that HF Sinclair has sued the EPA over delays in a decision on biofuel exemption. (World Energy News)
HF Sinclair sues EPA, asks court to speed biofuel waiver decisions (Mezha)
Refiners seek court order forcing EPA to decide small refinery exemptions (S&P Global)
HF Sinclair posts highest profit since 2022, plans lubricants separation (Reuters)
HF Sinclair reports improved earnings for renewables segment (Biodiesel Magazine)
EPA Commits to Ruling on Remanded SRE Petitions by Aug. 3 (Biodiesel Magazine)
EPA gives Delek refinery biofuel relief, finds HF Sinclair petitions ineligible (Reuters)

Excerpt from Reuters: This follows a similar action by the American Fuel and Petrochemical Manufacturers, which represents U.S. refiners and argued that the ⁠mandates would sharply increase compliance costs and fuel price. READ MORE

Excerpt from World Energy News: The EPA announced earlier this month that 42 petitions for small refinery exclusions remained pending.

The agency has not approved or denied any petitions in the last month. It faces a deadline of September 1, to provide decisions. READ MORE

Excerpt from Mezha: According to sources, this case could have serious consequences for biofuel producers and the oil products market, depending on whether a waiver from certain requirements is granted. The dispute concerns how the regulator should manage waivers from biofuel-use requirements and the implementation of the corresponding policy.

Context and Possible Consequences

A delay in the decision could affect production plans, investment, and price dynamics in the biofuel and traditional fuel sectors. Experts expect the lawsuit to bring regulators’ attention to the decision-making process for waivers from biofuel requirements and the use of biocomponents in fuel blends.

HF Sinclair does not name specific individuals or officials in this release, but emphasizes the importance of a transparent and timely EPA response to waiver questions.

The filing states that a prolonged delay could affect competition and supply stability in the market, particularly if waivers are implemented or repealed with positive or negative consequences for producers.

Official details on how exactly the EPA is considering waivers have not been publicly provided, but the company emphasizes the need for clarity and certainty in regulatory decisions.

Impact on the Industry

The court’s decision could determine the direction of development for the biofuel industry and the policy for using biocomponents in the U.S. fuel system. EPA’s response could affect plans for new plants, market supply, and the financial decisions of companies involved in biofuel.

There are currently no specific timelines for a ruling, but the case is considered significant for the regulatory environment in energy and environmental policy. READ MORE

Excerpt from S&P Global:

HF Sinclair, Alon Refining Krotz Springs file motion
EPA misses 90-day deadline for RFS appeals
RIN credits face Sept. 1 expiration threat

Two oil refiners have asked a federal appeals court to order the Environmental Protection Agency to decide their hardship exemption applications by Aug. 11, warning that further delays will render the renewable fuel credits at stake in their legal victory worthless.

Alon Refining Krotz Springs and HF Sinclair filed an emergency motion with the US Court of Appeals for the District of Columbia Circuit on July 24, according to public court records, saying the EPA has failed to act 108 days after the court vacated the agency's denial of their small-refinery exemptions from 2024 Renewable Fuel Standard obligations. The refiners said the EPA's inaction threatens to nullify their court win by allowing compliance credits known as Renewable Identification Numbers to expire on Sept. 1.

The motion marks an escalation in a dispute over the refiners' applications for relief from federal mandates requiring fuel suppliers to blend renewable fuels into their products. The DC Circuit in April ordered the EPA to reconsider its August 2025 denials of the exemption requests, noting the agency had 90 days under the Clean Air Act to act. That deadline passed July 23 with no EPA decision, according to the filing.

"EPA's unlawful and unreasonable delay requires petitioners to take up the Court's invitation to seek further relief," the refiners said in their motion. They warned that without a decision by Aug. 11 — 21 days before the Sept. 1 compliance deadline — the value of any returned 2024 RINs "will drop precipitously."

The court ordered EPA to respond to the motion by 5 pm ET on July 28, and said the refiners must reply to the EPA's response by 5 pm July 30. HF Sinclair did not respond to a request for comment. An EPA spokesperson said the agency would not comment on ongoing litigation.

Exemption fight

The refiners are seeking to enforce the court's mandate or obtain a writ of mandamus compelling the EPA to act, and asked for an expedited briefing and a court decision by Aug. 4 at the latest. The EPA opposes the relief requested, according to the filing.

At issue are compliance credits that refiners can use to meet their obligations under the Renewable Fuel Standard, which requires increasing volumes of renewable fuels in the US transportation fuel supply. Small refineries — those producing less than 75,000 b/d — can petition for hardship exemptions if they can demonstrate that compliance would cause disproportionate economic harm.

In an April 7 decision, the DC Circuit accepted the refiners' argument that "the clock is ticking for them to obtain meaningful relief," noting the value of credits "will decrease significantly" as the compliance deadline approaches. The court expedited its review and issued its mandate on April 24, expecting the EPA would have "sufficient time to act well before" Sept. 1, even if it took the full 90 days allowed by statute.

But the court also warned it could intervene if the EPA "fails to lawfully adjudicate the petitions on remand," the refiners noted in their motion.

The refiners said they have made "every effort to expedite these cases and avoid irreparable harm," but the EPA "is poised to nullify all of that by dragging its feet on a decision it could've made months ago."

Under EPA policy, if the agency grants exemptions on remand, it would return any 2024 RINs the refiners used to satisfy their 2024 obligations. But those credits can only be used for 2024 or 2025 compliance obligations.

The refiners argued the EPA has violated both the court's remand directive and the Clean Air Act's 90-day deadline for deciding exemption petitions. They said mandamus relief is warranted because the EPA has flouted a "clear duty" and there is no adequate alternative remedy that would provide timely relief before the credits expire.

"Only mandamus relief will make petitioners whole," they said, noting the Clean Air Act's citizen-suit provision requires 60 days' advance notice before filing suit — time that does not exist before the Sept. 1 deadline. READ MORE

Excerpt from Reuters: HF Sinclair (DINO.N), opens new tab on Tuesday posted its highest quarterly profit since Russia's invasion of Ukraine upended global oil markets and said it would separate ‌its lubricants and specialties unit into an independent publicly traded company.

The U.S. refiner, which also beat second-quarter profit estimates, is seeking to unlock value from its higher-margin specialty products business while returning more cash to shareholders. It raised its quarterly dividend by 5%.

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"Looking forward, we believe the fundamentals that drove strong second-quarter results across each of our business segments will persist in the third quarter, providing a positive backdrop as we move through the remainder of the year," CEO Franklin Myers said.

HF Sinclair's lubricants and specialties segment posted stronger quarterly results, with its adjusted core profit surging to $207 million from $55 ‌million a ⁠year earlier, driven by higher sales volumes and product prices.

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The company expects to complete the unit's separation within 12 to 18 months in a tax-efficient manner. The separation would allow the remaining HF Sinclair to focus on its core refining and marketing operations, ⁠it said.

Quarterly adjusted refinery gross margin per barrel rose 57.3% to $25.95 from a year earlier. Adjusted core profit at its refining segment more than doubled to $1.02 billion, compared with a year ago.

The company ⁠posted net income of $892 million, or $4.93 per share, marking its strongest quarterly profit since 2022 when Russia's invasion of Ukraine disrupted supply chains and drove a ⁠surge in commodity prices that boosted refinery earnings.

HF Sinclair reported quarterly adjusted profit of $5.31 per share, compared with analysts' average estimate of $4.51 per share, according to data compiled by LSEG. READ MORE

Excerpt from Biodiesel Magazine: HF Sinclair Corp. on July 28 reported strong second quarter results for its renewable segment with high margins supported by improved renewable identification number (RIN) prices. Renewable products sales volumes were also up for the quarter.

HF Sinclair currently produces renewable diesel at two of its facilities in Wyoming and also at its facility in New Mexico. The company’s renewables segment sold 59.91 million gallons of products during the second quarter, up from 54.79 million gallons during the same period of 2025.

According to HF Sinclar, renewables segment income before interest and income taxes was $30 million for the second quarter of 2026 compared to a loss of $4 million for the second quarter of 2025. Excluding the lower of cost or market inventory valuation adjustment charge of $30 million, and an impairment charge of $47 million, the segment reported adjusted EBITDA of $123 million in the second quarter of 2026, compared to a $2 million loss in the second quarter of 2025. READ MORE

Excerpt from Reuters: The U.S. Environmental Protection Agency on Monday granted a Delek US Holdings (DK.N), opens new tab refinery full exemption from federal biofuel blending requirements for 2024 while declaring hardship waiver ‌petitions for two refineries owned by HF Sinclair (DINO.N), opens new tab ineligible, according to agency documents.

The decision followed an emergency motion filed in late July by HF Sinclair and Delek-owned Alon Refining Krotz Springs in the U.S. Court of Appeals for the District of Columbia Circuit, ⁠meant to get the EPA to rule on their economic hardship exemption petitions for 2023 and 2024 compliance years by August 11.

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On Monday, the EPA granted Alon a full exemption from its 2024 obligations. It, however, found HF Sinclair's Artesia, New Mexico, refinery ineligible for its 2023 and 2024 petitions, saying the facility exceeded the 75,000 barrel-per-day crude throughput limit required to qualify as a small refinery ‌under Renewable ⁠Fuel Standard (RFS) regulations. READ MORE