The EPA, under new management, has changed course and no longer believes small refinery exemptions (SREs)are to be as freely handed out as they have been over the past four years.  President Biden and the EPA are announced earlier today that they support the biofuels industry in a lawsuit awaiting to be reviewed by the Supreme Court over small refinery exemptions granted to oil refiners. 

The 10^th Circuit Court of Appeals concluded in January of 2020 that EPA improperly granted exemptions to refineries that didn’t qualify. The court stated small refiner exemptions should only be granted as extensions.  Most refineries have not received these exemptions year after year.  There were only seven SRE’s granted in 2015 but under the prior administration 88 were granted with 35 being the peak in 2017. If the Supreme Court. 

Renewable Identification Numbers, or RINs, are credits used for compliance and are the currency of the Renewable Fuel Standard (RFS) program.  Renewable fuel producers generate RINs, market participants trade RINs, and obligated parties obtain and then ultimately retire RINs for compliance.  After the EPA made its announcement biomass-based diesel RIN prices pushed higher due to expectations that more gallons of renewable fuel will be needed this year and in successive years to meet mandated compliance. 

Shifting Assets to Renewable Diesel Continues

MMEX is the latest refiner looking to switch assets from crude distillation to the production of renewable fuels. MMEX originally selected VFuels to oversee the engineering, design and construction of a 10,000 barrel a day crude distillation tower.  However, MMEX decided, in part, to change focus and shift to a more green fuel mix in order to attract investors and to appease shareholders that have been focused on environmental concerns.

The company is currently working with Polaris Engineering to utilize its proprietary UltraFuels 2 process to process lighter crude feedstocks into ultra-low sulfur diesel, renewable diesel, and gasoline with carbon capture and storage.

MMEX also plans to run the plants off of solar power.  They are reportedly in negotiations to purchase 940 acres around the site for solar panels.  There will be a gas or diesel unit to as a back-up to the proposed solar power.  There 

There are many moving pieces in this plants efforts to become established in Texas.  The ideas are all items that may appeal with renewable fuel advocates, however, there is a lot going here from solar power to run the plants, to renewable diesel, and carbon capture.