Small Refinery Exemption Carve-Out Shifts Renewable Fuel Costs
S. 2742 — Protect Consumers from Reallocation Costs Act of 2025 · Filed by Mike Lee (R-UT) · 8 cosponsors · Introduced Sep 9, 2025 · Referred to committee
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What it does
This bill amends the Clean Air Act to prevent the EPA from reallocating renewable fuel blending obligations away from small refineries that receive exemptions. Currently, when a small refinery gets a hardship exemption from blending renewable fuels, the EPA can reassign that obligation to other refineries; this bill blocks that reallocation and requires the small refinery's production to still count toward the total fuel pool for calculating obligations.
Why we flagged it
The bill's operative mechanism is a carve-out from renewable fuel compliance obligations for small refineries, preventing the EPA from reallocating their exempted volumes to other parties. This is regulatory relief narrowly benefiting a defined industry segment.
What the text implies
- Exempted small-refinery volumes are excluded from reallocation but still counted in the total fuel pool, which may reduce the effective renewable fuel blending percentage across the entire market without reducing total obligations.
- Larger refineries absorb the obligations that would have been reallocated, increasing their compliance costs and potentially raising fuel prices for consumers.
The full analysis lists 3 implications of this text.
Who stands to gain
small refineries (reduced renewable fuel blending compliance costs); rural and independent refinery operators