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Growth Energy challenges EPA's refinery exemptions

Petition filed in Court of Appeals for the District of Columbia Circuit says EPA's inaction is a violation of law.

Growth Energy filed a petition in the Court of Appeals for the District of Columbia Circuit challenging the Environmental Protection Agency’s failure to address small refinery exemptions in its 2019 renewable volume obligation rulemaking, which was issued late last year.

Related: Reaction to 2019 RFS quotas

“EPA’s inaction on addressing lost gallons due to small refinery exemptions in this rulemaking is a clear violation of law,” said Growth Energy CEO Emily Skor. “In doing nothing to remedy these and other deficiencies, EPA has again failed to meet its statutory obligation to ensure that annual RVOs are met each year. Today’s filing calls for greater accountability from EPA to ensure that every renewable fuel obligation is fulfilled as the law intended.

Related: Trump administration continues RFS waivers

Background

Each year by Nov. 30, EPA is obligated to issue RVOs, which establish the total volume of renewable fuel that must be blended with transportation fuel for the upcoming calendar year. In 2018, it was revealed that in previous years EPA had been granting an unprecedented amount of small refinery exemptions to numerous refiners.

Related: EPA's Pruitt talks WOTUS, RFS with Farm Bureau members

Under the Renewable Fuel Standard, refineries producing transportation fuel must demonstrate each year that they have blended certain volumes of renewable fuel into gasoline or diesel fuel or acquired credits from others called renewable identification numbers, or “RINs”, representing all of part of those volume obligations.

Related: EPA catches heat for latest RFS moves

The RFS allows certain “small” refineries – those with a throughput of less than 75,000 barrels per day – to petition EPA for a temporary extension of an earlier exemption from the renewable fuel volume requirements. The exemption is supposed to exempt only those refiners who can show that compliance with the RFS would cause “disproportionate economic hardship.”

Related: Bankruptcy invigorates efforts to overhaul RFS

In 2018, Growth Energy became aware of a stark increase in the number of small refinery exemptions being granted in recent years, with no apparent effort by EPA to publicly identify those who received the exemptions, explain the increase, or account for renewable fuel obligations lost to the exemptions. The exemptions added up to close to 2.25 billion gallons of lost renewable fuel demand. Many of the exemptions had also been granted after EPA established the RVOs for a given year, but EPA made no effort to reallocate billions of biofuel gallons that had been lost as a result.

Related: Battle between farm interests, oil-refining advocates heats up

Despite repeated challenges by Growth Energy and others in 2018, both in petitions and comments to the agency and before federal courts, EPA has steadfastly failed to make good its statutory obligation to ensure that RVOs established by the EPA are met each year. EPA explicitly refused to take up the issue of small refinery exemptions in its 2019 RVO rulemaking, stating that such exemptions were “beyond the scope” of the rulemaking.

Related: Senators urge EPA to increase RVOs under RFS 

Growth Energy filed extensive comments challenging EPA’s refusal to address the issue, in particular challenging EPA’s failure to reallocate renewable volume obligations of exempt refiners.

Source: Growth Energy, which is solely responsible for the information provided and is wholly owned by the source. Informa Business Media and all its subsidiaries are not responsible for any of the content contained in this information asset.
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