On Friday July 26, the US Court of Appeals vacated at least some of the blanket small refinery exemption (SRE) denials made by the Environmental Protection Agency (EPA) in 2022.

As a result, selling pressure in the soybean oil market was intense, lowering prices by over 200 basis points to 43.66 cents per lb by the end of the day.

The Court of Appeals’ opinion on the case remains temporarily sealed, but the judgement is being viewed as a successful challenge for at least some small refiners. The number of affected petitions is unclear.

Small refineries — those with throughput of less than 75,000 barrels per day — can petition the EPA for an SRE, releasing them from their renewable volume requirements under the Renewable Fuel Standard (RFS) for the year. The EPA has denied several SREs in the past few years, and multiple lawsuits were filed in opposition to the denials.

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