As the U.S. Supreme Court looks to examine the use of small refinery exemptions authorized by the Environmental Protection Agency, several states filed an amicus curiae - or friend of the court - brief in support of the Biofuels Coalition’s challenge in the HollyFrontier Cheyenne Refining, LLC, et al., v. Renewable Fuels Association, et al.

The Supreme Court will hear oral arguments on April 27 on whether EPA was right to provide the refinery with a hardship exemption under the Renewable Fuels Standard. HollyFrontier and other refiners are asking the Supreme Court to overturn the January 2020 ruling of the U.S. Court of Appeals for the Tenth Circuit in which the court found EPA exceeded its authority in granting certain small refinery waivers.

EPA dashboard reports the exempted volume at 4.3 billion gallons for all renewable fuels, of which between 75% and 80% is ethanol.

The Biofuels Coalition - consisting of the Renewable Fuels Association, National Corn Growers Association, National Farmers Union and American Coalition for Ethanol - underscored that the statute only authorizes extensions of the initial temporary exemption that Congress granted to all small refineries at the start of the RFS program. The brief also maintains that the structure and purpose of the temporary exemption were meant to serve as a “bridge to compliance” for all refineries, rather than a permanent regulatory relief program, as the refineries argued in their opening brief.

Related: EPA signals new position on ethanol waivers

The EPA filed a brief in March supporting the Tenth Circuit’s decision, a change in direction from the EPA under the Trump administration. The refineries have until April 16 to file a brief replying to the arguments raised by the Biofuels Coalition and EPA.

Rural economies impacted

The states of Iowa, Nebraska, Illinois, Michigan, Minnesota, Oregon, South Dakota and Virginia filed an amicus curiae brief in the Supreme Court in support of the coalition’s arguments. The coalition also expressed its appreciation to the other biofuel and agriculture groups that filed amicus briefings in support of the biofuels industry.

Recognizing that “the renewable fuel and agriculture industries are the cornerstone of the economies of many states,” the brief from the states concludes that “the judgment of the court of appeals should be affirmed.”

“These industries—and the rural economies that they anchor—have grown over the past 16 years in reliance on the promise of the Renewable Fuel Standard,” according to the states’ brief. “And all States have an interest in the environmental benefits and energy independence that the RFS promises to achieve.  But the Environmental Protection Agency’s recent trend of freely granting small-refinery exemptions has undermined these promises.”

According to a joint statement from coalition members, “As the filings make clear, the exemptions have had a devastating effect on rural economies and on the demand for all types of renewable fuels.  We remain hopeful that the Supreme Court will affirm the Tenth Circuit’s well-reasoned decision, and we are very grateful that these states and other renewable fuel and agriculture interests have stepped up to endorse the decision as well.”

Industry groups also offer support

The National Biodiesel Board also filed an amicus brief. NBB argues that small refinery exemptions destroy demand and limit future growth of biodiesel and renewable diesel, which fulfill the requirements of several RFS categories. Growth Energy and the American Farm Bureau Federation (AFBF) also filed a brief in support.

NBB estimates that small refinery exemptions granted since 2017 directly destroyed demand for more than 550 million gallons of biodiesel and renewable diesel in the RFS advanced biofuel category. The use of petroleum diesel in place of those gallons added 5.5 million metric tons of carbon to U.S. emissions. Using these better, cleaner fuels reduces carbon emissions by an average 74% compared to petroleum. It also reduces particulate matter and hydrocarbon emissions and associated health impacts, leading to lower healthcare costs.

"Biodiesel and renewable diesel producers appreciate EPA's recognition that exemptions are only temporary mechanisms to transition small refineries into the RFS program. The agency has a duty to fully account for any exemptions it grants and ensure that the RFS volumes it sets each year are fully met,” says Kurt Kovarik, NBB's vice president of federal affairs. “Continued misuse of small refinery exemptions is a direct threat to the U.S. biodiesel and renewable diesel industry and the 65,000 U.S. jobs and more than $17 billion in annual economic activity it supports."

“The outcome of this case before the Supreme Court will be a pivotal moment for the biofuels industry and the integrity of the Renewable Fuel Standard,” says Growth Energy CEO Emily Skor. “We urge the Supreme Court to affirm the 10th Circuit decision, reject attempts by a handful of oil refiners to avoid blending obligations, and ensure the integrity of the RFS is upheld nationwide.” 

Growth Energy and AFBF’s brief outlines three main arguments. First, that EPA’s interpretation of the small refinery exemption eligibility provisions of the RFS is not entitled to deference on several grounds, not least of which are that it was not made in the exercise of EPA’s lawmaking authority and, in any case, no longer reflects EPA’s considered position. 

Second, the trade groups reinforce the respondents’ arguments on the merits of the question presented to the Court, arguing that the text, structure, and purpose of the RFS require the Court to hold that the meaning of “extension” in the RFS statute requires continuous, uninterrupted exemptions as a condition of future SRE eligibility.  

Third, Growth Energy and AFBF call on the Court to provide meaningful judicial review by also providing an adequate remedy that requires refineries to comply with blending obligations that had been unlawfully waived.