H.R. 5636: Protect Consumers from Reallocation Costs Act of 2025

This bill, titled the "Protect Consumers from Reallocation Costs Act of 2025," aims to amend the Clean Air Act specifically regarding the Renewable Fuel Standard. The key points of the bill are as follows:

Prohibition on Reallocation of Renewable Fuel Obligations

The bill introduces a prohibition against the reallocation of renewable fuel obligations for small refineries. Here’s how it works:

• Reallocation Limits: If a small refinery has received an exemption extension from renewable fuel obligations (the requirements to use renewable fuel), the Environmental Protection Agency (EPA) cannot reallocate these obligations to other entities.
• Inclusion of Small Refinery Volumes: When calculating the renewable fuel obligations of a person (a business or individual), the volumes of gasoline or diesel produced by their small refinery (that has an exemption) must be included in their overall fuel production count for that year. This means the fuel produced by the small refinery is considered when determining how much renewable fuel they need to supply.

Impact on Small Refineries

The bill is designed to provide stability for small refineries by ensuring they are not penalized through reallocation of obligations, allowing them to maintain compliance without further financial burdens. By including the fuel they produce in the calculations, it aims to recognize their contributions to fuel production adequately and help them stay operational without undue costs.

Goals and Objectives

The primary goal of this legislation is to protect consumers from potential costs related to the reallocation of renewable fuel obligations, which could impact fuel prices. It seeks to provide a clearer framework for small refineries and ensure they can continue to contribute to the fuel supply without facing excessive regulatory pressure regarding renewable fuel mandates.

Overall Significance

This bill represents an effort to balance the requirements of the Renewable Fuel Standard with the operational realities faced by small refineries. It attempts to safeguard these entities while also addressing the broader consumer interests regarding fuel costs.

Relevant Companies

• CLR - Continental Resources: As a producer engaged in refining operations, any shifts in obligations under the Renewable Fuel Standard could impact their cost structure and operations.
• VLO - Valero Energy Corporation: Valero is a large refiner that might be affected by the broader implications of renewable fuel obligations and the operational environment created by small refinery rules.
• HFC - HollyFrontier Corporation: Similar to others, HollyFrontier could see changes in its compliance obligations affecting its refinery operations if the conditions for small refineries shift significantly.