H.R. 8536: Fuel and Strengthen the American Refinery Act of 2026

The bill titled "Fuel and Strengthen the American Refinery Act of 2026" proposes several changes to the Renewable Fuel Standard (RFS) as part of the Clean Air Act. Below are the key provisions of the bill explained in layman's terms:

1. Changes to Renewable Fuel Volumes

The bill aims to regulate the amount of renewable fuel that must be blended into gasoline. Specifically, starting the year after the bill is enacted, the volume of renewable fuel that is not from advanced biofuels cannot exceed the estimated annual consumption of ethanol-blended fuel as projected in the Energy Information Administration's Annual Energy Outlook report.

2. Modifications to Credit Regulations

The bill introduces changes regarding the credits that can be generated and used for compliance with renewable fuel obligations:

• Credits generated between 2020 and 2022 can be used for compliance for five years after the bill is enacted, though up to 20% of the credits used in any year may come from this period.
• The bill prohibits the requirement to use electric credits (referred to as e-RINs) in compliance requirements.

3. Small Refinery Exemptions

Small refineries that face significant economic hardship can obtain exemptions from certain compliance requirements, and this process is streamlined:

• The bill defines small refineries as those processing fewer than 10,000 barrels of crude oil per day and having started production after January 1, 2007.
• It establishes specific criteria for assessing economic hardship based on the cost of compliance and refinery efficiency.
• If small refineries qualify, they can request exemptions, and if the government does not respond within a specified timeframe, the exemption request is automatically granted.
• The bill also ensures that if an exemption is granted, the renewable fuel obligations will not be shifted to other refineries.

4. Year-Round Sale of E15

The legislation also affects the sale of E15, a fuel blend containing 15% ethanol:

• The bill amends the Reid vapor pressure limitations so that E15 blends are treated similarly to those containing only 10% ethanol, which may facilitate broader sales of E15 throughout the year.
• It also modifies regulations for the percentage of ethanol that can be blended with gasoline, updating it to allow for blends containing between 10% and 15% ethanol.

5. Implementation and Administration

The implementation of these reforms falls under the jurisdiction of the Administrator of the Environmental Protection Agency (EPA), which is responsible for overseeing compliance and enforcing the provisions set forth in the bill.

Relevant Companies

• VAL (Valero Energy Corporation): As a major player in the refining sector, Valero may be impacted by changes in renewable fuel obligations and credits.
• MPC (Marathon Petroleum Corporation): Marathon, being one of the largest refiners in the U.S., would be directly affected by the bill's reforms to the Renewable Fuel Standard and any exemptions for small refineries.
• HFC (Hollyfrontier Corporation): Changes in the blending requirements and exemptions for renewable fuel compliance could significantly impact Hollyfrontier's operations.