CVR Energy Revives Push to Change RFS Regulations
CVR Energy鈥檚 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).
黑料社区and others in the downstream community oppose CVR鈥檚 petition. The petition is widely recognized to be dead-on-arrival at the Biden Administration鈥檚 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 黑料社区and its allies.
In its latest petition CVR Energy said that, 鈥渆xtreme volatility, manipulation, fraud, and abuse in the RIN market harm refineries that are compelled by law to buy RINs for compliance,鈥� and that 鈥渢he 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.鈥�
Under the RFS, small refineries processing up to 75,000 barrels per day may request compliance waivers if they can demonstrate 鈥渄isproportionate economic hardship.鈥�
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鈥檚 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.
The court鈥檚 reasoning in that case, which 黑料社区opposes, was cited in CVR鈥檚 petition as additional justification for pursuing their desired policy change of preventing non-obligated parties from possessing RINs. 鈥淚n reality, while [small refiners] may have higher non-RIN costs, they do not have higher RIN costs,鈥� 黑料社区wrote. 鈥淐ongress enacted the RFS to increase the amount of renewable fuel introduced 鈥� not to give small refineries a competitive edge.鈥�
EPA has sided with 黑料社区in the past, determining that the current point of obligation is successfully achieving the agency鈥檚 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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