Company: REX
Filing Date: 2025-12-04
Form Type: 10-Q
Source: 0000930413-25-003566
Chunk: 89

Company: REX AMERICAN RESOURCES Corp
Filing Date: 2025-12-04
Form: 10-Q
Item: Part I, Item 8
Chunk 89
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 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
to 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, issuing 63 full exemptions, 77 partial
exemptions of 50%, 28 denials and 7 ruled as ineligible. On November 7, 2025 the EPA issued two 100% waivers and 12 50% waivers.
These and additional SREs could lead to decreased RIN values and ethanol pricing. As of November 20, 2025, there were 17