On Friday of last week, the Environmental Protection Agency (EPA) announced its decisions on 175 individual small refinery exemption (SRE) petitions, seeking exemption from the Renewable Fuel Standard (RFS) obligations for the 2016-2024 compliance years.

The EPA is granting full exemptions to 63 petitions and partial exemptions to 77 while denying 28 others and determining seven petitions to be ineligible.

The agency also held hearings last week on its proposal to rescind the 2009 "endangerment finding," a scientific determination that greenhouse gas (GHG) emissions pose a threat to public health and welfare. This finding has served as the legal foundation for federal GHG regulations for more than 15 years, including vehicle emissions standards and power plant rules. The proposal, published on August 1, 2025, would significantly narrow EPA's authority under the Clean Air Act by eliminating the basis for regulating GHG emissions. If finalized and upheld in court, this action could prevent future administrations from imposing federal limits on GHG emissions from major sources.

Both chambers of Congress remain in their annual summer recess. They will reconvene next week on Tuesday, September 2. Upon their return, lawmakers will resume work on the twelve annual appropriations bills required to fund the federal government.

At present, the government is operating under a Continuing Resolution (CR), a temporary measure that maintains existing funding levels without enacting new policy changes. This funding is set to expire on September 30.

To avoid a government shutdown, both the House and Senate must pass all twelve appropriations bills and reconcile any differences before the new fiscal year begins on October 1. Given the limited legislative calendar and the recess period, the likelihood of completing this work on time remains very low. As a result, another Continuing Resolution is expected. The duration and terms of that CR remain uncertain, but it is unlikely to fund the government through the full year. Instead, we anticipate a short-term extension to buy lawmakers more time.

Before adjourning for the August recess, the Senate passed through committee a "mini-bus" package, which included three of the twelve funding bills. One of which, the Labor-Health and Human Services bill, set the funding for LIHEAP at $20 million higher than last year. However, the House, which has historically been less generous with the program, has yet to mark up its version of the bill.

NEFI is closely monitoring negotiations over fiscal year 2026 appropriations and will continue to keep members informed of any developments that could the heating fuels industry.