An analysis of EPA data by the Renewable Fuels Association (RFA) shows that small refinery exemptions for 2016 and 2017 have cost at least 1.6 billion gallons of biofuels in lost blending obligations under the Renewable Fuel Standard (RFS). The volume of lost blending obligations for these two years is 10 times the collective volume of lost volume from 2013-2015.

RFA analyzed data from EPA’s public RFS database and found that “small refiner exemptions have resulted in effectively lowering the 2017 required volume of renewable fuels by 1.11 billion gallons, or 6%. The data also show that small refiner exemptions also effectively reduced the 2016 RFS requirement by 523 million gallons,” according to the analysis.

Based on EPA’s EMTS database, the actual annual consumption of gasoline and diesel fuel in 2013-2015 was very close to the volume of gasoline and diesel fuel obligated for RFS compliance, as reported by obligated parties. “This means RFS blending obligations applied to virtually every gallon of gasoline and diesel fuel produced and consumed in the United States,” the analysis explained. “However, something clearly changed in 2016 and 2017. The EPA data show large discrepancies between actual gasoline and diesel consumption and the volumes obligated for renewable fuel blending as reported by obligated parties. The difference was 5.2 billion gallons in 2016, virtually doubling to 10.3 billion gallons in 2017. The only reasonable explanation for these large discrepancies between actual gasoline/diesel consumption and the volume of gasoline/diesel obligated for renewable fuel blending is the surge in small refiner exemption approvals,” the analysis found.

Read the analysis.

Agriculture Secretary Sonny Perdue acknowledged the loss during a hearing before the Senate Agriculture Committee Tuesday when asked about the EPA waivers. “It’s our understanding that probably, at last count, a billion one-two (1.12 billion) gallons were waived…our concern is that’s direct demand destruction,” said Perdue. “The RVO is there statutorily for a reason at 15 billion gallons.”

In answer to another question about the waivers, Perdue said, “We had to dig pretty deeply to get the number of gallons that had been waived this year.”

Listen to Secretary Perdue answer questions about the refinery waivers from Sens. Amy Klobuchar (D-MN) and Joni Ernst (R-IA).