Company: DK
Filing Date: 2025-11-07
Form Type: 10-Q
Source: 0001628280-25-050541
Chunk: 293

Company: Delek US Holdings, Inc.
Filing Date: 2025-11-07
Form: 10-Q
Item: Part I, Item 8
Chunk 293
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 costs, including significant additional costs to finance our compliance. These costs are highly volatile and unlike other refining companies Delek is not able to pass through its high compliance costs to its customers. 

Delek is an obligated party under the RFS, which requires us to obtain RINs to satisfy our annual Renewable Volume Obligation (“RVO”). While we are able to obtain many of the RINs required for compliance by blending renewable fuels manufactured by third parties or by our own biodiesel plants, we must also purchase RINs on the open market in order to comply with the quantity of renewable fuels we are required to blend under the RFS. The price and number of RINs an obligated party must acquire are impacted by government regulation requiring such credits, and also may be impacted by small refiner exemptions (“SREs”) granted by the EPA. In past years, the price of RINs has been highly volatile and the EPA’s decisions on SRE hardship petitions have been unduly delayed. Increasing RINs prices, inconsistent administration of the RFS by the EPA, and Delek’s market position has prevented us from passing through compliance costs of the program in the past and will likely continue in the future. While we cannot predict the future prices of RINs, the costs to obtain the necessary number of RINs could be material. Our future operating results are significantly dependent on the EPAs granting of SREs on a timely basis. If we are unable to pass the costs of compliance with the RFS on to our customers, if sufficient RINs are unavailable for purchase, if we have to pay a significantly higher price for RINs or if we are otherwise unable to meet the RFS mandates, our refinery operations, financial condition and results of operations could be adversely affected. 

In the past, we have received SREs under the RFS program for certain of our refineries. In August 2025, the EPA granted full and partial exemptions for certain of our refineries related to obligations for the 2019-2024 calendar years. We were able to use some of these RINs to satisfy our obligation for previous compliance periods. However, because RINs are valid for a one-year period, a majority of the refunded RINs had expired and therefore cannot be used or sold for value to offset future compliance obligations. The relief received also was not sufficient to offset our 2025 compliance obligation and thus Delek’s refineries will need to seek relief from the EPA for the