Company: REX
Filing Date: 2025-06-04
Form Type: 10-Q
Source: 0000930413-25-001941
Chunk: 75

Company: REX AMERICAN RESOURCES Corp
Filing Date: 2025-06-04
Form: 10-Q
Item: Part I, Item 8
Chunk 75
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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. In recent years, 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 less
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 Department of Energy and the Department of Agriculture, 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 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