Regulatory Announcement

Small Refinery Exemptions Under the 

Renewable Fuel Standard Program 

•	 The Energy Policy Act of 2005 (EPAct) established the Renewable Fuel Standard 

(RFS) program under Section 211 (o) of the Clean Air Act (CAA) mandating 

gasoline sold in the United States contain a minimum amount of renewable fuel 

content determined on an annual production volume basis (original RFS program 

denoted as RFS1). 

•	 Small refineries were exempt under the RFS1 program through December 31, 

2010. There were 59 small refineries that were exempt under the provisions in 

EPAct. 

•	 Section 1501 of EPAct required that DOE conduct a study to determine whether 

the RFS1 program imposes disproportionate economic hardships on any small 

refineries and if so, EPA is required to provide an extension of at least two years 

to any small refinery for which the RFS program imposes disproportionate 

economic hardship, as determined by the DOE study. 

•	 In 2007, the Energy Independence and Security Act (EISA) amended the 

original RFS program by increasing the renewable fuels mandate from 7.5 

billion gallons to 15.2 billion gallons in 2012, and extending it to 36 billion 

gallons of renewable fuel to be blended in 2022. The revised program is referred 

to as RFS2. 

•	 In February, 2009, DOE sent its Section 1501 study and recommendations to 

EPA. The study concluded that exemptions should not be extended for any small 

refinery. This study did not evaluate whether individual small refineries would 

suffer disproportionate economic hardship by complying with the Renewable Fuel 

Standard. The study noted that, if it was believed that a particular small refinery 

would suffer disproportionate economic hardship, individual refiners could apply 

directly to EPA for relief Under Section 211(o)(9)(B) of the Clean Air Act. 

Office of Transportation and Air Quality 

EPA-420-F-11-015 

May 2011 
Regulatory Announcement 

	 	 	 	 	 	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 	 	 	 	 	

		 	 	 	 	 	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 	 	 	 	 	 		

	 	 	 	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 	 	 	

	 	 		 	 	 	 	 	 	 	 	 	 	 		 	

	 	 	 	 	 	 	 	 		

	 	 	 	 	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 		

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 		

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	

	 	 	 		

	 	 	 	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 	 	

•	 However, in October 2009 Congress directed DOE to conduct a new study that would 

evaluate economic hardship on individual small refineries and solicit input from small 

refineries. DOE developed a survey of small refineries to collect data necessary to determine 

whether individual small refineries would suffer disproportionate economic hardship. Prior 

to developing this survey DOE conducted conference calls with an ad-hoc coalition of small 

refiners to identify the reasons why operators of small refineries believed that they would 

experience disproportionate economic hardship if their exemptions were not extended and 

to determine what information should be sought in the survey of small refineries. 

•	 After receiving and analyzing the surveys from the respondents, DOE determined that 

certain refineries would experience disproportionate economic hardship if their exemptions 

were not extended. The data and analysis were documented in a revised DOE study. DOE 

delivered the study to EPA on April 22, 2011. 

•	 Based on the developed metrics and analysis, DOE recommended that thirteen of the 

eighteen refineries receive an extension of their exemption. 

•	 Of the five small refineries that were not recommended to receive an extension of exemption, 

two are not primarily in the transportation fuel business, one is a unit of a large integrated 

refiner active in the renewable fuels business, and two were determined to be profitable and 

efficient refineries that are not facing economic hardship. 

•	 Therefore, based on the DOE study and as explicitly directed by EISA, EPA has notified the 

13 affected refineries that the exemption from the RFS2 provisions has been extended for a 

period of 2 years. 

•	 A redacted (confidential business information removed) version of the report has been 

posted to provide additional background on the DOE study. 

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