NACS Asks Federal Court to Reverse EPA Small Refinery Exemptions
NACS argues exemptions are unwarranted because compliance costs are priced into the cost of fuel.
Jul 20, 2026 | 2 min read
In a federal court filing on Friday, NACS shared industry expertise on small refinery exemptions issued under the Renewable Fuel Standard (RFS) and their effects on the national fuel market. The pending lawsuit challenges a decision by the U.S. Environmental Protection Agency (EPA) last year to grant exemptions based on the assumption that small refiners cannot recover their RFS compliance costs in the markets where they operate.
“EPA’s decision in this case ignored evidence about how the market really works,” said Matt Durand, NACS deputy general counsel. "Small refinery exemptions are not appropriate when RFS compliance costs are already priced into the cost of fuel and recovered by refiners of all sizes across the country.”
The RFS, established under the Clean Air Act, requires a minimum volume of renewable fuels to be blended into the nation’s transportation fuel supply each year. Refiners and importers can demonstrate compliance either by blending the fuels themselves or by purchasing credits (called Renewable Identification Numbers, or RINs) from other blenders.
Small refineries—individual facilities with an average throughput of less than 75,000 barrels of crude oil per day—may petition for exemptions from their annual RINs obligation if they can demonstrate that they would suffer “disproportionate economic hardship” from complying.
NACS argues that the court "should not endorse EPA's evidence-free analysis," which threatens to distort the fuel market and arbitrarily create winners and losers.
