FR 2021-00204

The document in question is a proposed rule by the Environmental Protection Agency (EPA) aiming to extend certain compliance deadlines related to the Renewable Fuel Standard (RFS) program. Initially published on January 15, 2021, this proposed rule seeks to alter the timelines for compliance and reporting for the 2019 and 2020 compliance years. The proposal suggests extending the compliance deadline for small refineries for 2019 to November 30, 2021, with attest engagement reports due by June 1, 2022. For all obligated parties for the 2020 compliance year, the compliance deadline would be moved to January 31, 2022, and their attest reports would also be due by June 1, 2022. These extensions are primarily intended to address ongoing uncertainties, particularly relating to legal challenges and the availability of small refinery exemptions.

General Summary

The Renewable Fuel Standard is a program that requires a certain volume of renewable fuel to be blended into the nation's transportation fuel. Compliance involves meeting specific renewable volume obligations and submitting necessary reports demonstrating adherence to these obligations. The EPA’s proposal to extend these deadlines arises from ongoing legal uncertainties that have created difficulties for small refineries regarding compliance and exemption status. The proposed extensions are an attempt to alleviate some of this uncertainty and give stakeholders additional time for planning and compliance.

Significant Issues and Concerns

Several issues and concerns emerge from this proposal. A key concern is the lack of clear detail on how the deadline extensions might impact the broader RFS market. The absence of such analysis could result in market instability, as stakeholders may be uncertain about future compliance requirements. Additionally, there is ambiguity surrounding the number of small refineries impacted by pending litigation and the potential implications if their exemption petitions are not resolved. The document also provides complex directions concerning small refineries that did not submit a compliance report by the original March 31, 2020 deadline, which may be difficult for affected stakeholders to interpret correctly. Furthermore, the criteria used to determine eligibility for the proposed compliance date extension lack clarity, potentially leading to confusion among refiners. Lastly, the economic implications for entities that have already complied with prior deadlines are not addressed, possibly overlooking the burden on those who adhered to the original timelines.

Public Impact

Broadly, this proposal could have mixed impacts on the public. On one hand, extending compliance deadlines might help ensure that fuel supply remains stable by providing refiners with more time to comply with RFS obligations. This stability might prevent disruptions that could eventually affect fuel prices or availability. On the other hand, extended deadlines could cause delays in meeting renewable fuel targets, which some might view as a setback in environmental goals. If renewable fuel production does not meet expectations, it could also influence broader transitions toward more sustainable energy sources.

Impact on Specific Stakeholders

For specific stakeholders, notably small refineries and other obligated parties, the proposal could provide relief by granting additional time to navigate legal uncertainties and compliance requirements. This may alleviate some financial burden related to possible penalties or additional costs of immediate compliance. Conversely, refiners who have already invested resources to comply with original deadlines might feel disadvantaged as they absorb costs incurred by early compliance efforts without seeing regulatory leniency or compensation.

Ultimately, the proposed rule hints at a careful balancing act between regulatory compliance mandates, ongoing legal dynamics, and stakeholder concerns within the renewable fuels sector. The EPA's approach, focused on providing additional time for compliance, underscores its recognition of the complex landscape navigated by small refineries under the RFS program. The proposal invites public comments, paving the way for further discussion and potential adjustments to the proposed extensions.

The document from the Federal Register involves the Environmental Protection Agency's (EPA) proposal to modify compliance deadlines for the Renewable Fuel Standard (RFS). Notably, it references financial implications under the Unfunded Mandates Reform Act (UMRA) and mentions financial thresholds that indicate the scale or impact of the proposed action.

Summary of Financial References

The document asserts that the proposed rule does not impose an "unfunded mandate" of $100 million or more, as described in the Unfunded Mandates Reform Act (UMRA), 2 U.S.C. 1531-1538. This means that the proposed deadlines will not require states, local, or tribal governments, or the private sector to spend this amount or more without adequate federal funding. This assertion is critical in evaluating the financial impact of the regulation on smaller government bodies and private entities.

Furthermore, the requirements imposed on the private sector by the proposal are stated to not exceed $100 million in any given year. This financial reference clarifies that the cost burden of compliance with the new deadlines, for entities like small refineries and other obligated parties, is expected to remain below this significant financial threshold.

Relation to Identified Issues

The financial references relate directly to identified issues concerning the potential economic impact on regulated parties. One notable concern is the uncertainty created by the extension of compliance deadlines, which might affect the broader RFS market dynamics. Although the document assures that the proposal will not surpass the $100 million threshold, there is no detailed analysis provided on how these delays might financially impact those who have already complied with previous deadlines, possibly facing sunk costs.

Additionally, the document's reference to not surpassing $100 million aims to alleviate concerns regarding significant economic impacts on small governments, yet it fails to address the potential financial burden on small refineries particularly embroiled in unresolved litigation over exemptions. The ambiguity concerning the number of these small refineries and the implications of their Small Refinery Exemption (SRE) petitions suggest potential costs that the document does not clearly quantify or address financially.

In summary, while the EPA outlines its proposed rule as remaining economically manageable within established financial limits, there remains a lack of clarity on the finer financial implications for involved entities, especially those who already fulfilled their obligations based on previously set deadlines. This lack of detail could contribute to ongoing uncertainty in the RFS market and among its stakeholders.