Ag, Biofuels Oppose EPA on 2018 SREs

Ag, Biofuels Groups Petition Court to Vacate 2018 Small-Refinery Exemptions

Todd Neeley
By  Todd Neeley , DTN Staff Reporter
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Agriculture and biofuels groups filed a court motion on Tuesday opposing EPA's proposed plan to review 31 small-refinery exemptions from 2018. (DTN file photo)

LINCOLN, Neb. (DTN) -- Agriculture and biofuels groups on Tuesday asked a federal court to set deadlines for EPA to review 31 small-refinery exemptions to the Renewable Fuel Standard for 2018, and to vacate those exemptions while the review is ongoing.

The 31 exemptions that had been granted by EPA earlier involve roughly 1.3 billion gallons of renewable fuel. The agricultural and biofuel groups with exemptions, if they stood, would lower the ethanol industry's revenue by $109 million, and lower ethanol prices by another $439 million. Those 2018 decisions led to idling of ethanol plants and caused at least one to permanently close.

The impact of those SREs continues because of the ripple effect of refiners carrying over renewable fuel credits (RINs) to future compliance years. If the SREs are allowed to stand, the biofuels industry could continue to suffer economic harm, the groups told the court.

On Aug. 25, the EPA filed a motion in the U.S. Court of Appeals for the District of Columbia Circuit asking the court to send back to the agency the SREs granted for 2018. Part of that motion was to leave the exemptions in place, pending a review. Biofuels and agriculture groups have now asked the court to vacate the 31 exemptions.

Though the agency has asked the court to allow a new review of the exemptions, biofuels and agriculture groups stand opposed because the EPA would do so without a deadline in place.

"While it is encouraging that EPA intends to reconsider the 31 SREs granted for the 2018 compliance year, we must oppose EPA's motion to remand without a deadline and without addressing the SREs' ongoing damage to the biofuel industry," a coalition of groups said in a press statement following the filing of the motion.

"In addition to seeking a remand of the SREs, the Biden administration EPA should ask that they be vacated; or at the very least, EPA should ask the court to set a deadline by which the reconsideration of these petitions must be completed. This would allow the Biden administration EPA to hit the reset button and conduct a new evaluation of each 2018 SRE request in light of the 10th Circuit Court decision in Renewable Fuels Association et al. v. EPA and the recent Supreme Court decision overturning one piece of the 10th Circuit decision."

Groups filing the motion include Growth Energy, Renewable Fuels Association, National Corn Growers Association, National Biodiesel Board, American Coalition for Ethanol and National Farmers Union.

"The challenged agency actions have inflicted serious injuries to petitioners' members -- farmers and biofuels producers," the groups said in their motion.

"To remedy those injuries, petitioners filed this action to vacate the agency actions. EPA now requests an unconditional remand without vacatur, which would allow the agency to evade judicial review indefinitely and thereby prolong the injuries that petitioners' members are suffering. Since none of the rationales EPA provides support an open-ended remand, the court should deny the agency's request."

The EPA said in its Aug. 25 motion that it plans to consider what, if any, effect the remaining holdings in a decision by the U.S. Court of Appeals for the 10th Circuit in Denver may have on EPA's implementation of the small-refinery exemption provision of the Renewable Fuel Standard.

In January 2020, the 10th Circuit ruled EPA violated the law in granting three exemptions. The ruling led biofuel agencies to push the Trump administration to apply the ruling nationally.

The agency said it would have been "premature" to consider prior to the Supreme Court's decision. EPA said in its motion on Aug. 25 small refineries that applied for extensions "have not received continuous extensions" of the exemption.

The Trump administration granted a total of 88 small-refinery exemptions from 2016 to 2020, amounting to about 4 billion gallons in lost biofuels demand. According to EPA's RFS dashboard, there are 59 small-refinery exemption requests pending from 2016 to 2021.

The EPA made an about-face on small-refinery exemptions in the Biden administration, deciding it agreed with the 10th Circuit decision. The Trump administration approved a handful of additional exemptions on its way out the door, an action eventually vacated by a court.

The agency defended the biofuels industry before the Supreme Court, arguing in a brief that few refiners would be eligible for extensions if the law is followed. For example, in 2014, five small refineries were eligible for extensions because they "maintained an exemption since the start of the RFS program," EPA said. There were three such refineries in 2015 and two in 2016.

Read more on DTN:

"EPA Grants Exemptions,"…

"EPA Moves to Remand '18 RFS Exemptions,"…

"SCOTUS Sides With Refiners on RFS,"…

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Todd Neeley

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