September 16, 2025
On September 16, 2025, the U.S. Environmental Protection Agency (EPA) did little to shed light on how small refinery exemptions (SREs) from 2023-2025 will be reallocated. While proposing two approaches — a 100% and a 50% reallocation of exempted volumes — EPA indicated it would entertain other allocations.
The specifics of EPA’s proposal were detailed in a Supplemental Notice of Proposed Rulemaking to revise the proposed Renewable Fuel Standard (RFS) “Set 2” volume requirements for 2026 and 2027. It follows on the Agency’s August 22 Small Refinery Exemption (SRE) decisions.
In a strongly worded news release that accompanied the proposal, EPA states “Under President Trump, EPA continues to restore the RFS program to align with Congressional directives and give American businesses and rural economies the certainty they need to thrive, all while using homegrown American biofuels.”
The Agency is seeking public comment the proposal through October 31, 2025, and will hold a virtual-only public hearing on October 1, 2025, to gather public input on the proposed rule.
Given how the decision on SRE reallocation will impact final renewable volume obligations (RVOs) for 2026 and 2027, EPA has indicated it will issue final RVOs and SRE reallocations in one final rule. RVOs were proposed on June 13, 2025. With the comment period for the SRE reallocations not ending until October 31, the final proposals likely will be delivered past the intended deadline of November 1, 2025.
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