CVR Energy’s Coffeyville Resources Refining and Marketing and Wynnewood Refining Company renewed a seven-year-old push to change the Renewable Fuel Standard, petitioning the Environmental Protection Agency (EPA) to prohibit non-obligated parties from possessing and trading Renewable Identification Numbers (RINs).
NATSO and others in the downstream community oppose CVR’s petition. The petition is widely recognized to be dead-on-arrival at the Biden Administration’s EPA, but is designed to set the stage for future litigation regarding the RFS.
The petition revives a 2017 effort by CVR Energy to change the Point of Obligation under the Renewable Fuel Standard that was successfully defeated by NATSO and its allies.
In its latest petition CVR Energy said that, “extreme volatility, manipulation, fraud, and abuse in the RIN market harm refineries that are compelled by law to buy RINs for compliance,” and that “the program as administered puts the companies and other similarly situated merchant and small referies at a permanent competitive disadvantage relative to large, integrated refiners that comply with the RFS through blending and exempt, non-refining blenders that have no obligation to comply.”
Under the RFS, small refineries processing up to 75,000 barrels per day may request compliance waivers if they can demonstrate “disproportionate economic hardship.”
The U.S. Court of Appeals for the 5th Circuit in November struck down a Biden Administration decision to deny small refinery exemptions. During the Trump Administration, EPA came under fire for issuing a high volume of SREs and abusing the exemptions to undercut the RFS’s mandate to increase biofuel blending. EPA reversed course during the Biden Administration, when the 10th Circuit found that the Trump EPA failed to explain its decision to discount earlier agency statements that refiners pass through their Renewable Identification Number (RIN) costs and are therefore unharmed by the RFS.
NATSO in early 2024 filed an amicus brief in litigation in the 5th Circuit pertaining to EPA’s denial of certain small refinery exemptions under the RFS. The court’s reasoning in that case, which NATSO opposes, was cited in CVR’s petition as additional justification for pursuing their desired policy change of preventing non-obligated parties from possessing RINs. “In reality, while [small refiners] may have higher non-RIN costs, they do not have higher RIN costs,” NATSO wrote. “Congress enacted the RFS to increase the amount of renewable fuel introduced … not to give small refineries a competitive edge.”
EPA has sided with NATSO in the past, determining that the current point of obligation is successfully achieving the agency’s objectives of displacing petroleum-based fuel with renewable substitutes in a manner that stabilizes price, deepens supply options, all while incentivizing fuel marketers to blend and sell renewable fuels.
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