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Tenth Circuit Court vacates RFS exemptions that would have erased 260 million gallons of ethanol demand.

Jacqui Fatka, Policy editor

May 20, 2021

3 Min Read

An order from the U.S. Court of Appeals for the Tenth Circuit vacated three small refinery exemptions granted by EPA to Sinclair the day before President Joe Biden was inaugurated. The court’s decision came promptly after EPA petitioned for the vacatur and remand of the exemptions on April 30 and Sinclair responded on May 18 that it did not oppose EPA’s request.

The court order states that any further administrative proceedings on these exemptions must be “consistent with this court’s decision in Renewable Fuels Association v. EPA,” where the Tenth Circuit ruled that EPA may only extend pre-existing refinery exemptions, that EPA’s exemption decisions must reconcile the agency’s consistent findings that all refineries recover the costs of compliance with the Renewable Fuel Standard, and that EPA may only use hardship caused by the RFS to justify granting exemptions.

Related: EPA approves three RFS waivers in final hours

The Trump administration’s final hour action would let those facilities out of their RFS compliance obligations for 2018 and 2019 estimated at 260 million gallons.

“We’re pleased that the court has vacated these improperly granted waivers and is sending them back to EPA for reconsideration,” RFA President and CEO Geoff Cooper says. “EPA did the right thing in April by requesting that these spurious exemptions be vacated, and we applaud the agency for honoring President Biden’s commitment to putting an end to the surge of illegitimate refinery waivers.”

As noted in EPA’s April 30 brief seeking a vacatur, RFA immediately filed a petition for review and an emergency motion to stay the effectiveness of the exemptions in the U.S. Court of Appeals for the D.C. Circuit, even though the identity of the refineries was unknown at the time. On January 21, the D.C. Circuit granted the administrative stay requested by RFA. Sinclair later confirmed that its Wyoming refineries were the recipients of all three exemptions, and the proceedings then moved to the Tenth Circuit.

In its April 30 filing, EPA said the previous administration “…did not analyze determinative legal questions regarding whether Sinclair’s refineries qualified to receive extensions of the small refinery exemption under controlling case law established by this Court in Renewable Fuels Association v. EPA, and there is substantial uncertainty whether, if EPA performed such an analysis, it could grant the petitions submitted by Sinclair.”

Notably, EPA’s brief underscores that Sinclair has already retired the RINs necessary to demonstrate compliance with its 2018 and 2019 RFS obligations, RFA explains. Thus, vacating the three exemptions, as requested by EPA, would preserve stability in the marketplace “…by ensuring that the RINs that Sinclair already retired to demonstrate its small refineries’ compliance with their 2018 and 2019 compliance obligations remain retired.”

Related: EPA asks court to vacate last-minute RFS waivers

American Coalition for Ethanol CEO Brian Jennings says they sought assurance from the EPA Inspector General in January that any last-minute SREs complied with federal law.

“We're encouraged the court has vacated these wrongfully granted waivers and is sending them back to EPA for further review. Given that the Biden EPA appears to be focused on getting the RFS back on track, we expect these last-minute waivers to ultimately be denied,” Jennings says.

Growth Energy CEO Emily Skor said they are glad to see the court move swiftly and agree with EPA's motion to vacate and remand Sinclair's improperly granted SREs. “Going forward, SCOTUS should affirm the 10th Circuit’s opinion and affirm EPA’s authority to deny this and all other improper SREs outright, once and for all,” she adds.

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About the Author(s)

Jacqui Fatka

Policy editor, Farm Futures

Jacqui Fatka grew up on a diversified livestock and grain farm in southwest Iowa and graduated from Iowa State University with a bachelor’s degree in journalism and mass communications, with a minor in agriculture education, in 2003. She’s been writing for agricultural audiences ever since. In college, she interned with Wallaces Farmer and cultivated her love of ag policy during an internship with the Iowa Pork Producers Association, working in Sen. Chuck Grassley’s Capitol Hill press office. In 2003, she started full time for Farm Progress companies’ state and regional publications as the e-content editor, and became Farm Futures’ policy editor in 2004. A few years later, she began covering grain and biofuels markets for the weekly newspaper Feedstuffs. As the current policy editor for Farm Progress, she covers the ongoing developments in ag policy, trade, regulations and court rulings. Fatka also serves as the interim executive secretary-treasurer for the North American Agricultural Journalists. She lives on a small acreage in central Ohio with her husband and three children.

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