Company: REX
Filing Date: 2025-06-04
Form Type: 10-Q
Source: 0000930413-25-001941
Chunk: 30

Company: REX AMERICAN RESOURCES Corp
Filing Date: 2025-06-04
Form: 10-Q
Item: Part I, Item 1
Chunk 30
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-2018 compliance years, undercutting the statutory renewable fuel volumes by a total
of 4.3 billion gallons. The EPA has not granted any small refinery waivers for 2019-2022. There remain 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. The EPA had denied 105 SREs in 2022. As a result of this Court
ruling, the EPA voluntarily moved to rescind the agency’s 2023 denial of 26 SREs. During the previous Trump administration,
the EPA granted more SREs than under other administrations. These and additional SREs could lead to decreased RIN values and ethanol
pricing. As of May 2025, there were 169 SRE petitions pending.

The EPA has issued Renewable Fuel Standard
volume obligations for calendar years 2023-2025. The volumes from conventional biofuels (which includes corn-based ethanol) were
15.0 billion gallons for 2023 through 2025. Additionally, in 2023, the EPA restored 250 million gallons previously waived. The
EPA was required to propose RVOs for 2026 by November 2024, but that deadline was missed. The EPA delivered the proposed 2026
RVOs to the White House Office of Management and Budget on May 14, 2025, which is the final step before being released to the
public for comments.

The EPA has issued emergency waivers for
the sale of E-15 gasoline for the 2025 summer months. This is the fourth consecutive year for these emergency waivers. The EPA
has not granted E-15 the same Reid vapor pressure waiver as E-10, so absent the emergency waivers, E-15 may not be sold in most
states from June 1 to September 15.

The IRA may impact our business by creating
a new Clean Fuel Production Credit, section 45Z, available for years 2025 to 2027. The Clean Fuel Production Credit is established
at approximately $0.02

28

per ethanol gallon per CI point reduction below a 50 CI score
threshold. The Act also raises the carbon capture tax credit from $50 per metric ton to $85 per metric ton, under section 45Q.
Taxpayers may elect to