In an ongoing attempt to hold the previous administration’s Environmental Protection Agency accountable for its actions to vacate 31 small refinery exemptions, biofuel and ag groups - Growth Energy, Renewable Fuels Association, National Corn Growers Association, National Biodiesel Board, American Coalition for Ethanol and National Farmers Union - opposed EPA’s most recent motion to remand 2018 SREs without vacatur.
The coalition of biofuel and ag leaders is currently challenging the 31 SREs in the D.C. Circuit, arguing that EPA’s issuance of the exemptions was arbitrary and capricious and exceeded the Agency’s authority under the Clean Air Act.
“While it is encouraging that EPA intends to reconsider the 31 SREs granted for the 2018 compliance year, we must oppose EPA’s motion to remand without a deadline and without addressing the SREs’ ongoing damage to the biofuel industry,” a joint statement from the petitioners state.
In August 2019, the Trump Administration’s EPA approved an unprecedented 31 SREs for the 2018 Renewable Volume Obligation compliance year with only a cursory, two-page decision. The coalition of biofuels and ag leaders filed a petition in the D.C. Circuit Court challenging EPA’s decision. The coalition asked the court to stay the 2018 SRE case in November 2019 pending the outcome of related litigation in both the 10th Circuit and D.C. Circuit Courts.
In January 2020, the 10th Circuit ruled in Renewable Fuels Association et al. v. EPA that EPA has no power to ‘extend’ an exemption that had lapsed. The Court also held that EPA lacks the authority to grant an exemption based on hardships not caused by Renewable Fuel Standard compliance, and also found that it was arbitrary and capricious for EPA to ignore its own prior studies showing that refiners recoup RFS compliance costs.
However, on June 25, 2021, in HollyFrontier v. Renewable Fuels Association, the Supreme Court vacated the 10th Circuit’s holding that EPA may only “extend” continuously pre-existing exemptions.
The coalition members state, “EPA nevertheless has had the opportunity to apply the other two 10th Circuit precedents not challenged in the HollyFrontier case and vacate the 31 SREs at issue in the D.C. Circuit.”
Instead, on Aug. 25, 2021, EPA filed a motion to remand the SREs without vacatur, meaning that if the motion is granted, the 31 SREs will stay in effect with no deadline or timeline for review or for resumption of the biofuel and ag leaders’ judicial challenge.
“In addition to seeking a remand of the SREs, the Biden administration EPA should ask that they be vacated; or at the very least, EPA should ask the court to set a deadline by which the reconsideration of these petitions must be completed,” says the biofuel and ag leaders. “This would allow the Biden administration EPA to hit the reset button and conduct a new evaluation of each 2018 SRE request in light of the 10th Circuit Court decision in Renewable Fuels Association et al. v. EPA and the recent Supreme Court decision overturning one piece of the 10th Circuit decision.”
Over the past four years the previous administration granted 86 waivers to “so-called small refineries” that resulted in the loss of 4 billion gallons of ethanol that was mandated to be blended into the fuel supply.
Geoff Cooper, president and CEO of Renewable Fuels Association, says as they argued before the Supreme Court, they believed Congress always intended the small refinery exemption to be temporary in nature.
The Biden administration has been criticized of its defense of the RFS as biofuel groups had hoped to see a more friendly interpretation of the RFS and its implementation.
The biofuel groups note, “We are looking to the Biden administration to renew the bond with farmers and rural economies by restoring certainty and integrity to the RFS.”
Shortly after the Supreme Court ruling, Reps. Angie Craig, D-Minn., and Randy Feenstra, R-Iowa, introduced the Small Refinery Exemption Clarification Act of 2021. The bipartisan legislation would clarify that only oil refineries that have been continuously receiving small refinery exemptions since 2011 would be eligible to petition for extensions from renewable fuel blending requirement exemptions.