Sens. Cruz, Lee, Colleagues Call on EPA to Halt Changes Increasing Refinery Compliance Costs
WASHINGTON, D.C. – U.S. Sen. Ted Cruz (R-Texas), Sen. Mike Lee (R-Utah), and their colleagues sent a letter to U.S. Environmental Protection Agency (EPA) Administrator Lee Zeldin calling on the EPA not to move forward with proposals to reallocate exempted renewable volume obligations. The proposals would shift compliance costs onto oil refineries across the country and undermine President Trump’s American energy dominance agenda.
Read the full letter here or excerpts below.
“We write to express our strong opposition to the proposal to reallocate exempted renewable volume obligations (RVO). Reallocating exempted volumes, whether at 100% or at 50%, poses a serious threat for smaller market and independent refiners that are ineligible for SREs but not large enough to absorb the dramatic increase in costs posed by the updated RVO and newly proposed reallocation costs. Reallocation costs would likely impose tens of millions of dollars of additional Renewable Fuel Standard (RFS) compliance burdens on each refiner. This proposal is an existential threat to many refiners and will certainly result in price hikes for American families.
“Furthermore, Congress has not authorized the reallocation of exempted volumes. As the EPA itself conceded, ‘the statute does not specifically require EPA to redistribute exempted volumes,’ instead relying solely on its ‘authority under Chevron’ due to alleged ambiguity. As you know, the Loper Bright Enterprises v. Raimondo decision expressly overturned Chevron deference in 2024, completely removing the statutory justification for the proposal.
“The reallocation proposal is a relic of the Biden- and Chevron-era. It is contrary to President Trump’s energy dominance and regulatory agenda, including his Executive Order ‘Directing the Repeal of Unlawful Regulations.’ Any regulation that relies on Chevron must be repealed or not implemented. We respectfully request that EPA not move forward with any proposal to reallocate exempted volumes.”
The letter was co-signed by Sens. John Barrasso (R-Wyo.), Mike Crapo (R-Idaho), and Cynthia Lummis (R-Wyo.).
BACKGROUND
Earlier this year, Cruz joined Sen. Lee in introducing the Protect Consumers from Reallocation Costs Act to block the EPA from forcing refineries to shoulder forgiven volumes from other refineries that do not meet the EPA’s environmental standards.
Currently, the EPA requires refineries in the U.S. to include a minimum volume of renewable fuel (e.g., ethanol, biodiesel, etc.) in all fuel sold, or pay to make up for any level of noncompliance. Small refineries may be granted exemptions if complying would cause “disproportionate economic hardship.” The EPA is currently considering whether to reallocate forgiven obligations over to non-exempt refineries, forcing compliant producers to shoulder even more costs despite no authorization from the Clean Air Act to do so.
By the EPA’s own calculation, the proposed rule would impose compliance costs of approximately $6.7 billion per year, while returning benefits of only $200 million per year. The American Fuel & Petrochemical Manufacturers (AFPM) estimates that compliance costs are closer to $70 billion.