Protect Consumers from Reallocation Costs Act of 2025
- Sponsor
- Rep. Kennedy, Mike [R-UT-3]
- Committees
- Energy and Commerce Committee (primary)
- Last action
- Sep 30, 2025
Bottom line
The bill aims to prevent the EPA from shifting renewable fuel compliance burdens from exempted small refineries to other fuel producers and importers, potentially stabilizing compliance costs for larger entities and indirectly affecting fuel prices.
What it actually does
This bill amends the Clean Air Act to explicitly prohibit the Environmental Protection Agency (EPA) Administrator from reallocating renewable fuel obligations from small refineries that have received an exemption under the Renewable Fuel Standard (RFS) program. It clarifies that even if a small refinery receives an exemption, the gasoline or diesel it refines must still be included in the total volume used to determine its own renewable fuel obligations for a given calendar year. The primary effect is to prevent other obligated parties from having to cover the exempted volumes.
Proponents argue
Proponents argue that this bill prevents an unfair burden on larger refineries and fuel importers, who would otherwise be forced to purchase additional Renewable Identification Numbers (RINs) to cover volumes exempted from small refineries. They contend that reallocating these obligations increases compliance costs, which can ultimately be passed on to consumers through higher fuel prices, thereby undermining the RFS program's intent and creating market instability. This bill ensures that exemptions truly reduce the overall obligation, rather than merely shifting it.
Opponents contend
Opponents, primarily from the renewable fuel industry and environmental groups, argue that preventing reallocation undermines the statutory renewable fuel volume targets set by Congress. They contend that if small refinery exemptions are granted and not reallocated, the total volume of renewable fuel blended into the nation's fuel supply will fall below the intended levels, reducing demand for biofuels and hindering environmental goals. They may also argue that this bill could incentivize more small refinery exemption requests, further eroding the RFS program's effectiveness.
The bill is very short and straightforward, making it highly accessible for any reader to understand its core provisions quickly.
Section 2, paragraph (E)(i)
Prohibition on Reallocation of Exempted Small Refinery Volumes
This provision explicitly states that the EPA Administrator may not reallocate renewable fuel obligations that apply to a small refinery which has received an extension of an exemption under the Clean Air Act. This means that if a small refinery is exempted from its blending requirements, those exempted volumes cannot be shifted to other, non-exempted fuel producers or importers.
Supporters argue
Supporters argue that this prohibition ensures fairness in the RFS program by preventing the EPA from arbitrarily shifting compliance burdens. They contend that reallocating exempted volumes punishes compliant entities and can lead to increased fuel costs for consumers, as the cost of RINs rises to cover the redistributed obligations. This provision provides regulatory certainty and prevents market distortions.
Critics contend
Critics assert that preventing reallocation undermines the environmental and energy security goals of the RFS program. If exemptions are granted and the volumes are not reallocated, the total amount of renewable fuel blended into the fuel supply will fall below the statutory targets. This reduces demand for biofuels, harming the renewable fuel industry and potentially increasing greenhouse gas emissions.
Tradeoffs
This provision navigates the tension between providing relief to small refineries, which often claim economic hardship from RFS compliance, and maintaining the integrity and volume targets of the Renewable Fuel Standard. It also balances the interests of petroleum refiners against those of renewable fuel producers.
Section 2, paragraph (E)(ii)
Inclusion of Exempted Volumes for Small Refinery's Own Obligation Calculation
This provision clarifies that when determining a person's renewable fuel obligations for a calendar year, the Administrator must include the gasoline or diesel refined by a small refinery owned or operated by that person, even if that small refinery has received an exemption. This ensures that while the exempted volumes are not reallocated to *other* parties, the exempted refinery's own production still counts towards its total volume when calculating its *own* renewable fuel obligation, if it were not exempted.