Growth Energy urges EPA to reallocate excess 2025 SRE credits

By Rebecca Stone

The Environmental Protection Agency proposes reallocating excess 2025 small refinery exemption RINs to renewable volume obligations for 2026 and 2027, and Growth Energy wants the rule finalized quickly.

The proposal addresses credits associated with gallons that small refiners did not have to blend under the Renewable Fuel Standard. Growth Energy says EPA can reallocate excess 2025 SRE RINs to other renewable volume obligations after exemptions create those surplus credits.

Growth Energy, which describes itself as the nation’s largest biofuel trade association, made the case for EPA’s proposal at a hearing. General Counsel Joe Kakesh said the agency accounts for projected SREs when setting renewable volume obligations and should use the same approach when excess RINs remain.

Why does Growth Energy want annual reallocation?

Kakesh testified: “Just as it has the authority—and obligation—to incorporate projected SREs into renewable volume obligations, EPA also has the authority and obligation to reallocate excess 2025 SRE RINs to other RVOs, here for 2026 and 2027.”

He said the transfer would help EPA meet Congress’ statutory mandate to ensure renewable volume obligations are met. Growth Energy also wants EPA to account for excess SRE RINs every year, not only for 2025, making reallocation a normal part of RFS administration rather than a one-time correction.

EPA’s proposal gives the agency two years in which to place the excess credits: the 2026 and 2027 obligation years. For biofuel producers, the association’s account is like moving a blending obligation from an exempt refinery to an obligated refinery rather than removing the gallon from the market.

Why are refiners opposing the transfer?

Growth Energy said refiners were seeking more relief after announcing near-record profits. It cited recent earnings reports from oil refineries that received SREs in August and a Wall Street Journal report that refiners were “printing money.”

CEO Emily Skor said: “EPA is right to account for every lost SRE gallon. Especially in a time of record profits, refiners shouldn’t be able to simply cast off their RVO blending obligations onto the American biofuels industry.”

Skor said refiners were urging EPA to abandon President Trump’s commitment to fully account for lost biofuel gallons and make producers and farmers whole. In her view, the request would amount to another handout, favoring refiners while shifting costs to biofuel producers, farmers and consumers.

She also cited a sixth consecutive year of negative returns for farms and consumer pressure for relief at the pump. Skor said EPA should limit the effect of SREs and lower costs by increasing the use of homegrown biofuels.

What will decide the outcome?

EPA still must finalize its proposed reallocation rule. Until then, the treatment of excess 2025 credits remains proposed rather than settled. The final text will govern their use in 2026 and 2027 obligation years.

Growth Energy posted Kakesh’s full testimony from the hearing, setting out the association’s legal argument and its requested annual policy.

For the biofuel stream, the immediate issue is who carries the federal blending obligation when a refinery receives an exemption. Growth Energy wants EPA to keep that obligation in the RFS market; refiners’ near-record profits make the transfer politically contested.

EPA’s final rule is the decisive next milestone: it will determine whether excess 2025 SRE RINs move into 2026 and 2027 obligations and whether future excess volumes receive the same treatment.