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Appeals court strikes down EPA refinery waivers of biofuel blending requirements

By Jessie Higgins
Appeals court strikes down EPA refinery waivers of biofuel blending requirements
Corn growers praised a U.S. Court of Appeals ruling that vacated three small refinery exemptions to federal biofuel blending requirements. File photo by Mike Theiler/UPI | License Photo

EVANSVILLE, Ind., Jan. 28 (UPI) -- Corn growers and biofuel producers are praising a federal appeals court ruling that the Environmental Protection Agency "exceeded its statutory authority" in exempting three small refineries from biofuel blending requirements.

The ruling, delivered late Friday by 10th U.S. Circuit Court of Appeals Judge Mary Beck Briscoe in Denver came in a lawsuit filed by four renewable fuel and farm groups in May 2018.

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The suit accused the EPA of violating the Renewable Fuel Standard by granting exemptions to three small refineries that did not qualify.

"This is a clear victory for us after a string of disappointments from the EPA and the administration on the enforcement of the Renewable Fuel Standard and how they decided to handle the small refinery waivers," said Brian Jennings, chief executive officer of the American Coalition for Ethanol, one of the groups that brought the suit.

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"And this decision can have a clear impact on future waiver requests."

It is unclear if the EPA will appeal.

In response to the ruling, the EPA said: "The Administration continues to review and examine the opinion in this case as we continue to implement the Renewable Fuel Standard consistent with the statute."

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The American Coalition for Ethanol, along with the Renewable Fuels Association, National Corn Growers Association and National Farmers Union, filed the lawsuit in response to a sharp spike in the number of small refinery waivers being granted by the EPA under the Trump administration.

Under the Clean Air Act, the Renewable Fuel Standard sets a yearly minimum for the amount of renewable fuels that must be blended into American gasoline and diesel. Small refineries are eligible for exemptions if they demonstrate they will suffer disproportionate economic hardship under the blending requirements.

But, there is a catch.

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"After the law was enacted, every single small refinery was granted an exception between 2010 and 2013," Jennings said. "After 2013, if a refinery wanted to continue being exempt, it would have to ask the EPA for an extension to the exemption."

President Barack Obama's EPA granted eight exemptions in 2013 and 2014, and seven in 2015.

However, beginning in 2016, the first year the Trump administration oversaw the extensions, the number more than doubled to 19. The next year it more than quadrupled to 35.

"The amended Clean Air Act allows the EPA to grant an 'extension' of the small refinery exemption -- not a stand-alone 'exemption' -- in response to a convincing petition," the appellate court ruling said.

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"The statue limits exemptions to situations involving 'extensions,' with the goal of forcing the market to accept escalating amounts of renewable fuels over time. None of the three small refineries here consistently received an exemption in the years preceding its petition [so] there was nothing for the agency to 'extend.'"

The court ruling vacated three exemptions named in the suit, and biofuel groups hope the decision will reduce the number of exemptions in coming years.

Such an outcome could help bolster corn and ethanol prices, the groups said.

"Due in large part to EPA's rampant and ongoing abuse of the SRE program, 2019 was one of the most challenging years in history for the agriculture and biofuel sectors," Roger Johnson, the National Farmers Union president, said in a statement.

"We believe this ruling will help restore the ability of the RFS to drive demand and expand markets for renewable fuels, as Congress intended, providing a badly needed shot in the arm for rural America."

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