API, Ethanol Majors Reach Legislative Deal on E15 Access, SREs
The American Petroleum Institute (API) has reached a deal with Growth Energy and the Renewable Fuels Association (RFA) that includes year-round access to E15 throughout the country — which could end an entrenched legislative impasse between industry groups on the oil and biofuels sides.
The deal will also significantly restrict the small refinery exemption (SRE) program after years of issues with the scheme, according to four sources familiar with the negotiations.
Currently titled the Nationwide Consumer and Fuel Retailer Choice Act of 2026, the bill would revise the long-running Reid Vapor Pressure (RVP) limitation on blends of ethanol during the high ozone period spanning June 1 to Sept. 15 — a provision from the Clean Air Act that has for years perturbed members of the ethanol industry that feel smog concerns over higher ethanol blends are inaccurate.
Alongside expanding that allowance to include E15, the bill would also nix a series of outstanding petitions from governors in the Midwest from 2022 that would have allowed their states to opt out of RVP limits.
The measure would also constrain the oft-controversial SRE program by creating a new definition of “small refinery company” within the statute.
Under that rewrite, a facility would only be able to claim an SRE if they processed 75,000 b/d or less in a calendar year, “across all of the facilities of the company, entity, or group of affiliated entities that produced transportation fuel subject to the requirements of paragraph.”
That alteration would leave more than a dozen facilities still eligible for relief, sources told OPIS this week, which is a staunch shift for a program that has at times doled out several dozen waivers to facilities throughout the country.
It also will foment uncertainty for several of the larger refining companies that in years past received separate waivers across several smaller facilities, as sources said a handful of the nation’s largest refining companies could be affected by the change.
Alongside more stringent parameters for receiving relief, the bill would also reduce the compliance requirements for small refineries by 75%.
The SRE program would also be altered to establish that any refinery that receives an SRE from 2026 and beyond must maintain a string of exemptions.
Should a company fail to meet the new requirements in a given calendar year, they will no longer be able to apply for a waiver in the future “regardless of whether the average aggregate daily crude oil throughput of the small refining company drops below that limit again.”
Those changes to the SRE program would go into effect beginning in 2028. All petitions for compliance before that period must be submitted to the agency by July 1, 2028, with final SRE decisions expected by Oct. 1, 2028. Also starting in 2028, the bill prevents the EPA from reallocating any future volumes lost to SREs.
The measure would also provide limited SRE relief to a few refineries for the 2016, 2017 and 2018 compliance years, and would require that the EPA propose and finalize related E15 infrastructure work associated with the RVP shift no later than 18 months following passage.
Emily Skor, CEO of Growth Energy, told OPIS on Tuesday that “a permanent, legislative solution will eliminate uncertainty across the entire liquid fuel supply chain, and we’ve worked hard to build support among a growing coalition of producers, farmers, refiners, and retailers.”
“Growth Energy is committed to seeing this through, and we’re hopeful that Congress can get to a durable solution,” Skor said.
The bill was also positively received from those outside direct negotiations, as Kurt Kovarik, vice president of federal affairs for the Clean Fuels Alliance America (CFAA), told OPIS at CFAA’s conference this week in Orlando that “it is in all of our collective interest to resolve a lot of these issues.”
“Having that uncertainty year-after-year is really exhausting for both policymakers and the marketplace,” Kovarik said.
Kovarik also said the group supports a revision of the SRE program, “which has certainly been abused as a loophole to… hand out favors to refiners to limit the use of biofuels that are required under the RFS.”
And Mike McAdams, president of the Advanced Biofuels Association (ABFA), said, “I am delighted to say… that this is long overdue.”
“The members of ABFA are strongly in support of the version of this going forward, as it pertains to SREs particularly,” McAdams said. “This is a job well done as constructed by the stakeholders that put it together.”
Sources have said the bill will likely be introduced in the coming weeks. Unlikely to find passage as a standalone bill, the measure is expected to be attached to omnibus legislation sometime this session.
Reporting by Patrick Newkumet, pnewkumet@opisnet.com; Editing by Jordan Godwin, jgodwin@opisnet.com