Experts say that Philadelphia Energy Solutions faces a potential short squeeze in the niche renewable fuel credit market if a U.S. bankruptcy judge denies the refiner’s request to shed some $350 million in outstanding compliance obligations, Reuters reported. PES, which owns the largest and oldest refiner on the U.S. East Coast, filed for chapter 11 protection on Jan. 22, blaming the cost of complying with the U.S. Renewable Fuel Standard for its financial woes. Under the RFS, refiners must either blend biofuels like ethanol into their fuel pool or, like PES, buy credits from those who do. Refiners have so far been unsuccessful in convincing the administration of President Donald Trump to reform the program. The PES bankruptcy is a pre-packaged deal with near-unanimous support from lenders that could be resolved as early as late February, but the preferred exit plan rests largely on a judge ruling the company does not need to purchase some $180 million worth of compliance credits.