On June 26, 2018, the Environmental Protection Agency (EPA) published its proposed rule for establishing the volume obligations under the Renewable Fuels Standard (RFS) (EPA Proposed Rule). If finalized, the proposed rule would set the requirements for obligated parties to comply with the RFS for calendar year 2019, as well as the requirements for biomass-based diesel for calendar year 2020. On its face, the proposed rule and its obligations appear to be non-controversial and straightforward. Buried within the proposed rule, however, is a mechanism for potentially reducing the mandate below the statutory requirements and EPA’s stated obligations. Overall, the proposed rule continues the significant reduction of cellulosic ethanol based on limited production capacity, as well as continuing the increases for biomass-based diesel. As EPA explains, it is making full use of the waiver authority granted by Congress in the statute to reduce cellulosic ethanol requirements. This is not controversial and is largely based on EPA projections of the ability of the industry to produce cellulosic ethanol; an estimate of capacity to produce 381 million gallons, which is over 8 billion gallons below the statutory requirements. Similarly, EPA is making full use of its statutory authority to reduce the total renewable fuel volumes by the full amount of the cellulosic reduction. It leaves 4.88 billion gallons of advanced biofuel obligations which are likely to be filled by biomass-based diesel above 2.1 billion gallons. On its face, the proposed obligations do not appear controversial. EPA has discretionary authority for waiving down the cellulosic mandate, as well as the advanced and total mandates up to the amount of the cellulosic waiver amount. The 2019 proposed obligations appear to align with the statutory mandates. What is not apparent in the numbers, however, is buried in the small print and it involves continued use of hardship exemptions for small refiners.