Company: REX
Filing Date: 2025-09-02
Form Type: 10-Q
Source: 0000930413-25-002856
Chunk: 126

Company: REX AMERICAN RESOURCES Corp
Filing Date: 2025-09-02
Form: 10-Q
Item: Part I, Item 2
Chunk 126
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, 2025 to January 31, 2026. The
Company includes the results of operations of One Earth in its Consolidated Statements of Operations on a delayed basis of one month as
One Earth has a fiscal year end of December 31.

Results of Operations

Trends and Uncertainties 

Renewable Fuel
Standard II, established in October 2010, has been an important factor in the growth of ethanol usage in the United States.
There has been much uncertainty in the enforcement of RFS II. When it was originally established, RFS II required the volume
of “conventional” or corn derived ethanol to be blended with gasoline to increase each year until it reached 15.0
billion gallons in 2015 and required that it remain at that level through 2022. There are no established congressional target
volumes beginning in 2023. The EPA has the authority to waive the biofuel mandate, in whole or in part, if there is
inadequate domestic renewable fuel supply or the requirement severely harms the domestic economy or environment. In addition,
under RFS II, a small refiner that processes fewer than 75,000 barrels of oil per day can petition the EPA for a waiver
of their requirement to submit RINs. The EPA, through consultation with the United States Department of Energy and the USDA,
can grant the refiner a full or partial waiver, or deny the waiver. The EPA issued 88 refinery exemptions for 2016-2018
compliance years, undercutting the statutory renewable fuel volumes by a total of 4.3 billion gallons. The EPA did not grant
any small refinery waivers for 2019-2022. There have been multiple ongoing legal challenges on how the EPA has handled the
small refinery waivers. In July 2024, the U.S. Court of Appeals for the District of Columbia Circuit vacated many of the
EPA’s 2022 SRE denials. As a result of this Court ruling, the EPA voluntarily moved to rescind the agency’s 2023
denial of 26 SREs. On August 22, 2025, the EPA ruled on much of the backlog of SREs, with 63 full exemptions, 77 partial
exemptions of 50%, 28 denials and 7 ruled as ineligible. These and additional SREs could lead to decreased RIN values and
ethanol pricing. As of August 22,