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MONDAY, AUGUST 03, 2026   |   SPECIAL REPORT & ANALYSIS

RFS POLICY  |  SMALL-REFINERY EXEMPTIONS

EPA Grants Full or Partial Relief on Three SRE Petitions

The 2024 exemptions cover 160 million RINs, with no new reallocation
 

Analysis  ·  August 3, 2026

The Environmental Protection Agency (EPA) granted one full small-refinery exemption and two 50% exemptions from the Renewable Fuel Standard for the 2024 compliance year, removing a combined 160 million RINs from the affected refineries’ obligations. EPA denied none of the eligible petitions on hardship grounds but determined that three other petitions — two for 2023 and one for 2024 — were ineligible. The action covers six petitions submitted by four refineries. Link to announcement. 

For 2023, EPA found both petitions ineligible, resulting in no exempted volume. For 2024, the agency considered four petitions, granting one in full, two partially and finding one ineligible. EPA has not publicly identified which refineries received each decision because the refinery-specific information and Department of Energy assessments are treated as confidential business information.

The three ineligible petitions came from two refineries that exceeded the statutory 75,000-barrel-per-day crude-throughput ceiling during the compliance years for which they sought exemptions. One refinery exceeded the limit in 2023; the other exceeded it in both 2023 and 2024. 

Table 1. EPA decisions on the six small-refinery exemption petitions announced Aug. 3, 2026. Source: EPA.

No New Reallocation Announced

EPA did not announce a new reallocation of today’s 160 million-RIN exemption volume or revise the 2026 and 2027 percentage standards.

EPA’s March 2026 “Set 2” rule already added fixed reallocation volumes equal to 70% of the 2023-2025 exemptions accounted for when that rule was finalized. Those additions totaled 990 million RINs for 2026 and 1.04 billion RINs for 2027, including 210 million and 250 million biomass-based diesel RINs, respectively. 

Figure 1. RIN volumes reallocated under EPA’s March 2026 Set 2 rule vs. the 112 million RINs the agency did not reallocate for the Aug. 3 exemption grants. Source: EPA; Ag Policy & Markets Daily calculations.

Importantly, EPA said in the Set 2 response-to-comments document that the March rule was intended to be its complete action addressing 2023-2025 exempted obligations and that it did not intend to take additional actions covering those years. The March calculations incorporated exemptions issued through EPA’s November 2025 decisions, but today’s grants came after the Set 2 rule was finalized.

That indicates today’s 160 million RINs will not automatically be added to the existing reallocation. Applying the March rule’s 70% formula would have produced another 112 million RINs of reallocated obligations, but EPA made no such adjustment today. A future rulemaking or change in policy would be needed to impose that additional volume.

EPA Will Return Previously Retired RINs

For refineries that already demonstrated 2024 compliance, EPA will reverse the applicable retirement transactions and return the RINs. A refinery receiving a full exemption can recover all corresponding RINs it retired; a refinery receiving a 50% exemption can recover half. Affected refiners also must revise their 2024 compliance reports to reflect the reduced obligations.

Unlike older RINs returned under EPA’s 2025 exemption decisions, the 2024-vintage RINs remain commercially useful. EPA said they can be traded or applied toward still-open 2025 RFS obligations. The 2025 compliance deadline is Sept. 1, 2026, giving the recipients a relatively short but meaningful window to sell or use the credits.

The precise number immediately placed back into circulation will depend on how many of the 160 million RINs the successful petitioners had already retired. Any portion associated with obligations that had not yet been satisfied would instead represent RINs the refineries no longer have to acquire.

Market Impact

The decision is refinery-friendly and modestly bearish for RIN prices. Every petition that cleared EPA’s eligibility test received at least partial relief, reinforcing the agency’s policy of following the Department of Energy hardship matrix and granting 50% exemptions when the evidence supports partial rather than full hardship.

Returning potentially as many as 160 million usable 2024 RINs increases the supply of credits available immediately ahead of the 2025 compliance deadline. The effect should be greater than the impact of returning expired RINs because these credits can still be traded and used for compliance.

EPA did not disclose the 160 million-RIN total by RIN category, preventing a precise calculation of the effects on D6 conventional ethanol RINs versus D4 biomass-based diesel and D5 advanced-biofuel RINs. Still, the additional supply should reduce refiners’ near-term demand for other available credits and could pressure multiple RIN categories.

The physical impact on ethanol, biodiesel and renewable diesel demand is less direct. EPA is not undoing fuel that was already blended during 2024. However, the returned credits can substitute for other RINs in 2025 compliance, weakening the marginal incentive to acquire credits generated from additional renewable-fuel use and enlarging the carryover supply entering later compliance periods.

Bottom Line

EPA delivered meaningful relief to the successful small refineries, placed additional usable RIN supply into the market and did not provide a corresponding new demand offset through reallocation. That combination is favorable for affected refiners, negative at the margin for RIN values and likely to renew biofuel-industry criticism that exemptions are eroding the demand protection intended by the RFS.

AG POLICY & MARKETS DAILY   |   RFS POLICY  |  SMALL-REFINERY EXEMPTIONS — MONDAY, AUGUST 03, 2026