Ethanol Blog

LINCOLN, Neb. (DTN) -- The U.S. Environmental Protection Agency this week filed a voluntary motion to rescind the agency's 2023 denial of 26 small-refinery exemptions to the Renewable Fuel Standard, in a brief filed with the U.S. Court of Appeals for the District of Columbia Circuit.

In July 2023, the agency announced it had denied 26 of 28 SRE requests that were remaining at the time. The motion is unopposed by refining companies and biofuels groups.

"Since EPA issued the 2023 denial action, this court issued an opinion in Sinclair Wyoming Refining Co. v. EPA, which reviewed EPA's decisions in 2022 to deny then-pending small-refinery exemption petitions," EPA said in the motion filed on Oct. 21, 2024.

"This court held that the 2022 denial actions were arbitrary and capricious. Because the 2023 denial action relied on the same approach as the 2022 denial actions, EPA intends to reconsider the 2023 denial action in light of this court's opinion in Sinclair."

In April 2022, the EPA denied 36 small-refinery exemption requests all from the 2018 RFS compliance year. All but three of those petitioners filed lawsuits on that action.

In June 2022, the agency then denied 69 petitions and all but one of the refining companies petitioned the court for review.

The U.S. Supreme Court this week granted review in a case filed by refining companies, asking the court to decide in what court SRE cases should be heard, https://www.dtnpf.com/….

In August 2019, the Trump administration approved 31 SREs for the 2018 RFS compliance year.

A coalition of biofuels and ag leaders, including Growth Energy, filed a petition in the D.C. appeals 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 U.S. Court of Appeals for the 10th Circuit and D.C. appeals court.

In January 2020, the 10th Circuit ruled in Renewable Fuels Association et al. v. EPA that the agency has no power to "extend" an exemption that had lapsed. The court also held EPA lacks authority to grant an exemption based on hardships not caused by RFS compliance, and also found it was "arbitrary and capricious" for EPA to ignore its own prior studies showing that refiners recoup RFS compliance costs.

The Supreme Court on June 25, 2021, vacated the 10th Circuit ruling in HollyFrontier v. Renewable Fuels Association that EPA may only extend continuously pre-existing exemptions, but the other two holdings from the 10th Circuit decision remained intact.

EPA then had the opportunity to apply the other two 10th Circuit precedents not challenged in the HollyFrontier case and request a remand and vacatur of the 31 SREs at issue in the D.C. Circuit.

However, on Aug. 25, 2021, EPA instead filed a motion to remand the SREs without vacatur. In response, the D.C. Circuit remanded the exemptions back to EPA, but, as a result of this biofuel coalition's motion in opposition, required the agency to make new determinations on the contested SREs no later than April 7, 2022.

Todd Neeley can be reached at todd.neeley@dtn.com

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