Biodiesel Volumes Challenged

Biofuels, Petro Companies Petition Court

Todd Neeley
By  Todd Neeley , DTN Staff Reporter
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The U.S. Environmental Protection Agency is being challenged for how it set biodiesel volumes in the Renewable Fuel Standard. (DTN file photo by Renewable Energy Group)

OMAHA (DTN) - A biofuels group and two petroleum interest groups have asked a federal appeals court to review the final 2017-2018 biodiesel volumes in the Renewable Fuels Standard published in the Federal Register.

A handful of separate petitions have been filed with the U.S. Court of Appeals for the District of Columbia Circuit.

On one side the National Biodiesel Board is asking for a review based on what it says are similar issues it raised in a separate ongoing lawsuit challenging the RFS. The biodiesel board in that lawsuit alleges the U.S. Environmental Protection Agency has no statutory authority to control or limit the growth of biofuels markets.

Such petitions are required to be filed within 60 days when the rule is published in the Federal Register.

The EPA has faced a number of questions and criticism from biofuels groups and others in the past decade, for how the agency implemented the RFS. The legal action comes at a time when some members of Congress are exploring possible reform to the law.

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Although the biodiesel industry was poised to produce about 2.6 billion gallons in 2016, the EPA went with its original proposal of 2 billion gallons for biomass-based biodiesel in 2017 and 2.1 billion gallons in 2018, in a final rule published in the federal register in December.

Conversely, the American Petroleum Institute and American Fuel and Petrochemical Manufacturers also filed petitions for review. In its petition the petroleum institute asks the court to vacate the final volumes.

"API seeks review on the grounds that aspects of the final rule are arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law," API said in its petition, "are in excess of statutory jurisdiction, authority, or limitations; and were adopted without observance of procedure required by law." The group asks the court to hold the rule as "unlawful."

During the last week of January a number of groups filed briefs with the court challenging EPA's management of the RFS on a number of fronts.

Though Congress may at some point consider changing the RFS, the lawsuit originally filed by Americans for Clean Energy attempts to force the agency to apply the law as the groups believe was intended. The group argues in a brief this week the EPA has no statutory basis to control or limit the growth of biofuels. Joining the group is the American Coalition for Ethanol, Biotechnology Innovation Organization, Growth Energy, National Corn Growers Association, National Sorghum Producers, Renewable Fuels Association and the National Farmers Union.

The National Biodiesel Board also is a petitioner in that lawsuit in a separate legal challenge. In briefs filed on that case the NBB argues EPA ignored Congressional intent on the RFS when it comes to advanced biofuels like biomass-based diesel.

The EPA has faced a wide array of criticism for missing statutory deadlines and about the methods used in setting biofuel volumes.

Monroe Energy, LLC, an obligated party in the RFS, in two separate briefs challenged EPA's methods for determining renewable volume obligations on cellulosic ethanol and biomass-based diesel. In addition, Monroe argues the agency did not follow the law by rejecting a petition to change the point of obligation in the RFS. Monroe asks the court to essentially wipe out renewable volume obligations set for a number of years from 2014 to 2017.

The biofuels and agriculture groups said in their brief the EPA hasn't followed the law when setting the annual blending volumes.

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

Follow him on Twitter @toddneeleyDTN

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Todd Neeley