The Renewable Fuel Standard (RFS) has presented a tremendous opportunity for economic growth for small businesses across the country since its inception in 2007. To highlight the benefits that the RFS has provided small business and address the threat of small refinery exemptions (SREs) to our rural economy, Growth Energy submitted comments last week to the U.S. Environmental Protection Agency (EPA) as part of its review of the RFS under section 610 of the Regulatory Flexibility Act (RFA). Under the RFA, EPA is required to evaluate how regulations like the RFS affect small businesses across the nation and how the agency can better administer regulations. Our comments not only provide evidence on the economic benefits of the RFS, but also laid out a pathway for how EPA can improve the outlook for small businesses under the program.
The RFS Supports Small Businesses
Today, there are nearly 200 biofuels plants in operation across the U.S., and those plants are supported by a substantial network of farms, innovative small businesses, and communities representing hundreds of thousands of jobs. However, those biofuels plants and the businesses and people who support them are increasingly at risk of suffering economic harm due to the rapid expansion in small refinery exemptions (SREs) over the past two years. Our comments highlighted the critical role that the RFS has played in driving economic growth in our rural communities and across the nation:
“In general, as detailed below, EPA should acknowledge that the RFS program, when properly implemented, is vitally important to the economic well-being of a variety of small businesses in the ethanol production, distribution, and retail ecosystem,” our comments note. “Unfortunately, as also detailed below, the manner in which the Agency is actually administering the RFS has undermined its integrity through misapplication of the Small Refinery Exemption; undermining the program in this manner harms small businesses.”
Asking EPA to Support Small Business by Addressing SREs
In addition to providing statistics on the numerous benefits of the RFS for communities and drivers across the nation, our comments ask EPA to re-evaluate its definition of what has constituted a “small” refinery over the past two years and not grant frivolous exemptions to large-scale corporations that own so-called “small refineries.” Our comments argue that EPA’s current practice of granting exemptions to small refineries owned by multi-national corporations is, in fact, far more likely to harm small businesses than support them:
“EPA’s practice of granting so many exemptions to large entities is doubly harmful to small businesses: not only do the few truly small refiners (who presumably do qualify as “small businesses”) suffer competitive harm when EPA provides numerous exemptions to their billion-dollar competitors, but the independent farmers, small biofuel producers, and other small businesses that rely on a robust RFS also suffer economically when the efficacy of the program is undermined and its benefits are diluted.”
EPA’s review of the impacts of the RFS on small businesses is an opportunity to reinforce the program going into the 2020 RFS reset and to address the agency’s own mismanagement of SREs to the detriment of small oil refiners and our rural communities. Our comments not only provide updated statistics for EPA, but also give the agency a pathway forward to continue to drive economic growth for producers and consumers across the country.