Year-Round E15 and RFS Reform

(a) Ethanol waiver (1) Existing waivers Section 211(f)(4) of the Clean Air Act (42 U.S.C. 7545(f)(4)) is amended— (A) by striking (4) The Administrator, upon and inserting the following: (4) Waivers (A) In general The Administrator, on; (B) in subparagraph (A) (as so designated)— (i) in the first sentence— (I) by striking of this subsection each place it appears; and (II) by striking if he determines and inserting if the Administrator determines; and (ii) in the second sentence, by striking The Administrator and inserting the following: (B) Final action The Administrator; and (C) by adding at the end the following: (C) Reid vapor pressure A fuel or fuel additive may be introduced into commerce if— (i) (I) the Administrator determines that the fuel or fuel additive is substantially similar to a fuel or fuel additive utilized in the certification of any model year vehicle pursuant to paragraph (1)(A); or (II) the fuel or fuel additive has been granted a waiver under subparagraph (A) and meets all of the conditions of that waiver other than any limitation of the waiver with respect to the Reid Vapor Pressure of the fuel or fuel additive; and (ii) the fuel or fuel additive meets all other applicable Reid Vapor Pressure requirements under subsection (h).. (2) Reid vapor pressure limitation Section 211(h) of the Clean Air Act (42 U.S.C. 7545(h)) is amended— (A) by striking vapor pressure each place it appears and inserting Vapor Pressure; (B) in paragraph (4), in the matter preceding subparagraph (A), by striking 10 percent and inserting 10 to 15 percent; and (C) in paragraph (5)(A)— (i) by striking Upon notification, accompanied by and inserting On receipt of a notification that is submitted after the date of enactment of the Agricultural Act of 2026, and is accompanied by appropriate; (ii) by striking 10 percent and inserting 10 to 15 percent; and (iii) by adding at the end the following: Upon the enactment of the Agricultural Act of 2026, any State for which the notification from the Governor of a State was submitted after January 1, 2022, and before the date of enactment of the Agricultural Act of 2026 and to which the Administrator applied the Reid Vapor Pressure limitation established by paragraph (1) shall instead have the Reid Vapor Pressure limitation established by paragraph (4) apply to all fuel blends containing gasoline and 10 to 15 percent denatured anhydrous ethanol that are sold, offered for sale, dispensed, supplied, offered for supply, transported, or introduced into commerce in the area during the high ozone season.. (b) Termination of petitions; adjusted obligation (1) In general Section 211(o)(9) of the Clean Air Act (42 U.S.C. 7545(o)(9)) is amended— (A) in subparagraph (B)— (i) in clause (i), by striking A small and inserting Subject to clause (iv), a small; and (ii) by adding at the end the following: (iv) Termination of exemption and petitions (I) In general Beginning in calendar year 2028, the Administrator may not apply or enforce any extension of an exemption granted pursuant to a petition under this subparagraph or otherwise continue to enforce the exemption under subparagraph (A) with respect to any small refinery. (II) Limitation on petitions Notwithstanding any other provision of law— (aa) no small refinery may petition for an extension under this subparagraph with respect to any calendar year after calendar year 2027; (bb) the Administrator may not consider any petition for an extension under this subparagraph, with respect to any calendar year, that is submitted after July 1, 2028; and (cc) to the maximum extent practicable, the Administrator shall, not later than October 1, 2028, act on all outstanding petitions.; (B) by redesignating subparagraphs (C) and (D) as subparagraphs (D) and (E), respectively; and (C) by inserting after subparagraph (B) the following: (C) Small refinery certainty (i) Reduction of compliance requirements Beginning in calendar year 2028 and for each calendar year thereafter, the Administrator shall reduce the compliance requirements under paragraph (2) for a calendar year for each small refinery that received an exemption under subparagraph (A)(i) by a volume equal to the lesser of— (I) the greatest actual annual production volume of transportation fuel by the small refinery during any of calendar years 2023 through 2025 for which the small refinery— (aa) petitioned for an extension of an exemption under subparagraph (B) by June 1, 2026; and (bb) met the requirements of paragraph (1)(K); and (II) the actual annual production volume of transportation fuel produced by the small refinery during the calendar year during which the Administrator is applying the reduction under this clause. (ii) Application of obligations for exceedances If the actual annual production volume of transportation fuel by a small refinery exceeds the volume described in clause (i)(I) in a calendar year, the amount of the actual annual production volume that exceeds the amount described in that clause shall be subject to the obligations under paragraph (2). (iii) No subsequent redesignation If, in calendar year 2028 or any calendar year thereafter, a refinery no longer meets the requirements of paragraph (1)(K) to be a small refinery, the Administrator may not apply the reduction under clause (i) in whole or in part during the calendar year in which the refinery no longer meets those requirements or any subsequent calendar year. (iv) Reallocation (I) In general Notwithstanding paragraph (2)(B)(ii) and except as provided in subclause (II), in calendar year 2028 and each calendar year thereafter, when determining compliance obligations for parties subject to paragraph (2) implementing the applicable volumes determined under that paragraph, the Administrator shall reallocate all volumes of transportation fuel for which small refineries were not obligated as a result of the application of clause (i) for that calendar year, less a volume of transportation fuel equivalent to an obligation of renewable fuel that the Administrator determines has, in total, an energy content equal to the energy content of 500,000,000 gallons of conventional biofuel, based on a projection of the volume of transportation fuel that the Administrator expects to be exempt as a result of the application of that clause for that calendar year. (II) Volume adjustment Notwithstanding paragraph (2)(B)(ii), in calendar year 2028 and each calendar year thereafter, the Administrator shall reconcile the projection made under subclause (I) with the actual annual volume of transportation fuel that is exempt as a result of the application of clause (i) for the applicable calendar year by adding or subtracting a corresponding reallocated volume of transportation fuel in a subsequent calendar year.. (2) Savings provision Nothing in this section or an amendment made by this section affects any remedy available to a small refinery (as defined in paragraph (1) of section 211(o) of the Clean Air Act (42 U.S.C. 7545(o))) with respect to petitions for extensions of exemptions under paragraph (9) of that section and, for purposes of the application of those extensions and the review of the denial of those petitions, paragraph (9) of that section shall be applied as in effect on the day before the date of enactment of this Act. (c) Generation of credits by small refineries under the renewable fuel program Section 211(o)(9) of the Clean Air Act (42 U.S.C. 7545(o)(9)) (as amended by subsection (b)(1)) is amended by adding at the end the following: (F) Credits generated for 2016–2018 compliance years (i) Rule For any small refinery described in clause (ii) or (iii), the credits described in the respective clause shall be— (I) returned to the small refinery and, notwithstanding paragraph (5)(C), deemed eligible for future compliance years; or (II) applied as a credit in the EPA Moderated Transaction System (EMTS) account of the small refinery. (ii) Compliance years 2016 and 2017 Clause (i) applies with respect to any small refinery that— (I) retired credits generated for compliance years 2016 or 2017; and (II) submitted a petition under subparagraph (B)(i) for that compliance year that remained outstanding as of December 1, 2022. (iii) Compliance year 2018 In addition to small refineries described in clause (ii), clause (i) applies with respect to any small refinery— (I) that submitted a petition under subparagraph (B)(i) for compliance year 2018 by September 1, 2019; (II) that retired credits generated for compliance year 2018 as part of the compliance demonstration of the small refinery for compliance year 2018 by March 31, 2019; and (III) for which— (aa) the petition remained outstanding as of December 1, 2022; or (bb) the Administrator denied the petition as of July 1, 2022, and has not returned the retired credits as of December 1, 2022.. (d) Fuel infrastructure rulemaking (1) In general Not later than 18 months after the date of enactment of this Act, the Administrator of the Environmental Protection Agency shall, after a period of notice and public comment, finalize a rule modifying the regulations of the Environmental Protection Agency under the Clean Air Act (42 U.S.C. 7401 et seq.) and the Solid Waste Disposal Act (42 U.S.C. 6901 et seq.) (commonly known as the Resource Conservation and Recovery Act of 1976) relating to the sale and distribution of gasoline-ethanol blends that contain greater than 10 volume percent ethanol and less than or equal to 15 volume percent ethanol. (2) Requirement In finalizing the rule required under paragraph (1), the Administrator of the Environmental Protection Agency shall modify the E15 fuel dispenser labeling requirements and the underground storage tank regulations of the Environmental Protection Agency with respect to compatibility with gasoline-ethanol blends.