Technical corrections only. The only change between v2 and v3 is the addition of the Clerk's name in the attestation block, reflecting a procedural update as the bill moved from the House to the Senate. There are no substantive policy changes in the bill text.
To amend the Clean Air Act with respect to the ethanol waiver for Reid Vapor Pressure under that Act, and for other purposes.
- Sponsor
- Rep. Smith, Adrian [R-NE-3]
- Committees
- Environment and Public Works Committee (primary)
- Last action
- May 14, 2026
Bottom line
The bill aims to expand the market for higher-ethanol fuel blends while restructuring the Renewable Fuel Standard's small refinery exemption program to balance fuel flexibility with refinery economic concerns.
What it actually does
This bill amends the Clean Air Act to allow for the year-round sale of E15 (gasoline with 15% ethanol) by modifying Reid Vapor Pressure (RVP) regulations. It also significantly reforms the Renewable Fuel Standard (RFS) program by phasing out existing small refinery exemptions, introducing a 75% reduction in compliance requirements for a newly defined category of 'small refining companies,' and establishing a new, highly targeted exemption for 'at-risk qualifying small refineries' facing imminent closure due to RFS costs.
Proponents argue
Proponents argue the bill provides much-needed regulatory certainty for E15, promoting greater use of renewable fuels, supporting the agricultural sector, and potentially lowering fuel costs for consumers. They contend that reforming the RFS exemption process creates a more stable and predictable market for renewable fuel credits, while the new 'at-risk' exemption provides a targeted safety net for truly struggling refineries.
Opponents contend
Opponents might argue that expanding E15 could have unintended environmental consequences or compatibility issues with older vehicles and infrastructure. Critics of RFS reform might contend that phasing out small refinery exemptions too quickly could disproportionately harm smaller, independent refiners, leading to closures and job losses, while the new 'at-risk' exemption is too narrow or creates new loopholes that undermine the RFS goals.
The bill is relatively short, but its technical nature and reliance on amendments to existing law require careful reading and some background knowledge of fuel regulations and the RFS to fully grasp its implications.
Section 1(a)(1) of H.R. 1346, amending Section 211(f)(4) of the Clean Air Act.
Year-Round E15 Reid Vapor Pressure Waiver
This provision amends the Clean Air Act to allow fuels or fuel additives that are substantially similar to certified fuels, or those with existing waivers, to be introduced into commerce without specific Reid Vapor Pressure (RVP) limitations, provided they meet all other RVP requirements. This change effectively grants a year-round waiver for E15, removing the RVP volatility restrictions that previously limited its sale during summer months and expanding its market availability.
Supporters argue
Supporters argue this provision removes an unnecessary regulatory barrier, allowing consumers access to a lower-cost, higher-octane fuel blend year-round, which also supports domestic agriculture and reduces reliance on foreign oil.
Critics contend
Critics may raise concerns about potential increases in evaporative emissions during warmer months, which could exacerbate ozone pollution, and potential compatibility issues with older vehicle fleets or fueling infrastructure.
Tradeoffs
This provision balances promoting renewable fuel use and consumer choice against potential environmental impacts and infrastructure compatibility concerns.
Section 1(a)(2) of H.R. 1346, amending Section 211(h) of the Clean Air Act.
Adjustment of Reid Vapor Pressure Limitation for 10-15% Ethanol Blends
This section modifies the RVP limitations for gasoline-ethanol blends, specifically changing '10 percent' to '10 to 15 percent' in relevant parts of the Clean Air Act. It also retroactively applies the RVP limitation established for 10-15% blends to states that submitted notifications after January 1, 2022, and before the enactment date, ensuring consistent treatment for E15 across these states.
Section 1(b) of H.R. 1346, amending Section 211(o)(1) of the Clean Air Act.
New Definition for 'Small Refining Company'
This provision introduces a new definition for 'small refining company' under the Clean Air Act's Renewable Fuel Standard (RFS) program. It defines such a company as one whose daily average aggregate production of obligated fuels in calendar year 2025 did not exceed 75,000 barrels per day across all its affiliated facilities. This definition is crucial for determining eligibility for the adjusted compliance requirements and new exemption criteria introduced later in the bill.
Section 1(c)(1)(A) and (B) of H.R. 1346, amending Section 211(o)(9) of the Clean Air Act.
Phased Termination of Small Refinery Exemptions (SREs)
This provision mandates the termination of existing small refinery exemptions (SREs) and prohibits the Administrator from applying or enforcing any extensions of these exemptions starting in calendar year 2028. It also sets strict deadlines, disallowing new SRE petitions for any year after 2027 and requiring the Administrator to act on all outstanding petitions by October 1, 2028. This effectively phases out the traditional SRE program, aiming to create a more predictable RFS market.
Section 1(c)(1)(C) of H.R. 1346, inserting new subparagraph (C) into Section 211(o)(9) of the Clean Air Act.
Reduced RFS Compliance for Small Refining Companies
Beginning in calendar year 2028, this provision reduces the RFS compliance requirements of each eligible 'small refining company' (as newly defined in the bill) by 75 percent. However, if a company's average aggregate daily production of obligated fuels exceeds the 75,000 barrels per day limit in 2026 or any subsequent year, it permanently loses eligibility for this adjusted compliance, regardless of future production levels.
Section 1(d) of H.R. 1346, adding new subparagraph (F) to Section 211(o)(9) of the Clean Air Act.
Return of RFS Credits for Past Compliance Years (2016-2018)
This provision mandates that RFS credits (RINs) retired by certain small refineries for compliance years 2016, 2017, and 2018 be returned to them or applied to their EPA Moderated Transaction System (EMTS) accounts. This applies to refineries that had outstanding SRE petitions as of December 1, 2022, or, for 2018, those whose petitions were denied by July 1, 2022, and credits not returned by December 1, 2022. This aims to rectify past compliance burdens for small refineries whose SRE petitions were delayed or denied.
Section 1(e) of H.R. 1346, adding new subparagraph (G) to Section 211(o)(9) of the Clean Air Act.
Prohibition on Reallocating Reduced RFS Obligations
This provision explicitly prohibits the Administrator from reallocating any renewable fuel obligation volumes that were reduced for small refining companies under the new adjusted compliance requirements (subparagraph (C)) to other obligated parties. This means the 75% reduction in compliance for eligible small refining companies will result in a net reduction in the total national renewable fuel obligation, rather than shifting the burden to larger refiners.
Section 1(f) of H.R. 1346.
EPA Rulemaking for E15 Infrastructure
This section directs the EPA Administrator to finalize a rule within 18 months of enactment to modify regulations under the Clean Air Act and Solid Waste Disposal Act (RCRA) concerning the sale and distribution of gasoline-ethanol blends containing 10-15% ethanol (E15). Specifically, the rule must modify E15 fuel dispenser labeling requirements and underground storage tank (UST) regulations to ensure compatibility with these blends.
Section 1(g) of H.R. 1346, adding new subparagraph (H) to Section 211(o)(9) of the Clean Air Act.
New Exemption for At-Risk Qualifying Small Refineries
Beginning in 2028, this provision creates a new, limited exemption from RFS compliance for 'at-risk qualifying small refineries.' To qualify, a refinery must petition the Administrator by December 31, demonstrating imminent risk of closure, permanent idling, or conversion to a renewable fuel facility, *solely caused by RFS compliance costs*, and that its ownership has not changed since the bill's enactment. Petitions and supporting information are publicly disclosed. The Administrator can grant partial or full exemptions, but the total exempted volume across all such refineries is capped (150 million gallons of conventional biofuel equivalent for 2028, adjusted thereafter). A 'qualifying small refinery' is defined as one that previously received an SRE extension or has a crude oil throughput not exceeding 10,000 barrels per day and began production between Jan 1, 2007, and Jan 1, 2026.
The new definition of 'small refining company' sets a specific threshold of 75,000 barrels per day of obligated fuels in calendar year 2025 across all affiliated entities.
Section 1(b), amending Section 211(o)(1) of the Clean Air Act.
Why it matters:This is standard legislative practice for defining terms, but the specific numerical threshold is highly consequential for determining eligibility for RFS relief.
Case for: A precise, quantifiable definition ensures that RFS relief is directed to genuinely small entities and provides clarity for the industry.
Case against: The specific threshold could be seen as arbitrary, potentially excluding some small refiners or including others who might not be considered 'small' by other metrics.
Estimated impact: This definition will determine which refiners are eligible for the 75% RFS compliance reduction, significantly impacting their future operating costs.
The 'no subsequent redesignation' clause states that if a small refining company exceeds the 75,000 barrels per day production limit in calendar year 2026 or any subsequent year, it permanently loses eligibility for the 75% adjusted RFS compliance reduction.
Section 1(c)(1)(C)(ii), amending Section 211(o)(9) of the Clean Air Act.
Why it matters:This is a technical detail that enforces the eligibility criteria, but its strictness makes it a significant 'gotcha' clause.
Case for: Ensures that the adjusted compliance is strictly for companies that consistently remain below the small refinery threshold, preventing companies from cycling in and out of eligibility.
Case against: The 'one strike and you're out' rule could be overly punitive, potentially disincentivizing small refiners from increasing production even temporarily if market conditions warrant it, for fear of losing future RFS relief.
Estimated impact: Could significantly impact the long-term strategic planning and operational flexibility of eligible small refining companies.
For the new 'at-risk' exemption, a qualifying small refinery must demonstrate that the risk of closure is 'solely caused by the cost of compliance with the requirements of paragraph (2)' and that 'the ownership of the qualifying small refinery has not changed after the date of enactment of this paragraph.'
Section 1(g)(ii)(I)(bb) and (cc), adding new subparagraph (H) to Section 211(o)(9) of the Clean Air Act.
Why it matters:These are critical limiting factors designed to prevent abuse of the exemption, but their strictness means very few refineries may actually qualify.
Case for: These strict criteria ensure that the exemption is truly a last resort for refineries facing existential threats directly attributable to RFS costs, and that it is not used by new owners seeking to acquire struggling assets for RFS relief.
Case against: Proving that RFS compliance costs are the *sole* cause of financial distress can be extremely difficult, as refinery economics are complex. The ownership change clause might also prevent legitimate new owners from revitalizing a struggling refinery with the benefit of this exemption.
Estimated impact: These clauses will severely limit the number of refineries that can successfully obtain the 'at-risk' exemption, making it a very narrow safety net.
Any petition submitted for the 'at-risk' exemption, including all supporting documentation, 'shall not be eligible for treatment as confidential business information' and 'shall be made publicly available by the Administrator not later than 30 days after the date of such submission.'
Section 1(g)(iii), adding new subparagraph (H) to Section 211(o)(9) of the Clean Air Act.
Why it matters:This provision is a direct response to past criticisms of the opacity of the SRE program, ensuring public scrutiny of any future exemptions.
Case for: Mandatory public disclosure ensures transparency and accountability in the exemption process, allowing public and industry stakeholders to scrutinize the justifications for relief and prevent favoritism or abuse.
Case against: Refineries may be reluctant to submit petitions if it means publicly disclosing sensitive financial data, competitive strategies, or proprietary information, potentially undermining the intent of the exemption.
Estimated impact: This provision will significantly increase the transparency of RFS exemptions, but may also deter some eligible refineries from applying.