In comments submitted today, Growth Energy, the nation’s largest biofuel trade association, called on the U.S. Environmental Protection Agency (EPA) to finalize its proposal to reallocate 100% of biofuel gallons lost due to small refinery exemptions (SREs) granted under the Renewable Fuel Standard (RFS).
Growth Energy’s comments encouraged EPA to finalize the supplemental proposal it released in September. This would ensure that the agency accounts for every lost biofuel gallon exempted by EPA’s August 2025 decision to grant several SREs for the 2023-2025 Renewable Volume Obligation (RVO) compliance years. The comments also highlight the legal obligation EPA has to fully reallocate these gallons and the negative impacts to the industry and the rural economy if EPA decides to not reallocate, or to reallocate only a portion of the exempted volumes.
“Reallocating every exempted gallon is not just the right thing to do, or the smartest thing to do for the market — it’s also what the law clearly requires,” said Growth Energy CEO Emily Skor. “EPA and this Administration made a promise to rural America to get the RFS back on track — reallocating any less than 100% of all the 2023-2025 SREs EPA has granted would break that promise, and farmers and rural communities would suffer because of it. We urge EPA to commit to full reallocation, and we look forward to continuing our work with the agency to increase American energy dominance through the increased use of homegrown biofuels.”
Read Growth Energy’s full comment here.
Background
Under the RFS, EPA sets the number of gallons of renewable fuels (such as biofuels) that must be blended into the nation’s total fuel supply each year. Those obligations apply to fuel producers (petroleum refiners) and importers. The law also allows EPA to grant SREs in rare circumstances when a refiner demonstrates “disproportionate economic hardship” in its efforts to comply with the RFS.
On August 22, 2025, the EPA released its decision on 175 pending SRE petitions, covering compliance years 2016-2024. In all, EPA approved a total of 140 petitions: 63 full exemptions and 77 partial (50%) exemptions.
EPA also announced that it would release a supplemental proposal to its proposed Set 2 RVO to reallocate exempt SRE gallons from 2023-2025 compliance years to the 2026 and 2027 compliance years covered by Set 2. Under this approach, refiners will be required to make up for lost gallons from those years, ensuring that SREs don’t compromise renewable fuel demand.
EPA released the supplemental proposal on SRE reallocation on September 16, 2025. It indicated that the agency is considering accounting for “volumes representing complete (100 percent) reallocation and 50 percent reallocation for SREs granted in full or in part for 2023 and 2024, as well as those projected to be granted for 2025, as part of the ongoing RFS rulemaking.” In its comments, Growth Energy called on the agency to reallocate 100 percent of lost gallons, thus protecting the rural economy from unwarranted demand destruction.
