Growth Energy Signals Intent to Sue EPA

Fed Up With RFS Volumes Delay, Growth Energy Warns EPA's Regan Lawsuit Imminent

Todd Neeley
By  Todd Neeley , DTN Staff Reporter
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Growth Energy plans to sue the EPA for delays in releasing Renewable Fuel Standard volumes. (DTN file photo)

LINCOLN, Neb. (DTN) -- Ethanol interest group Growth Energy will sue the EPA for its delay in releasing Renewable Fuel Standard volume proposals, the group announced in a letter to EPA Administrator Michael Regan on Tuesday.

The agency is way past due on releasing proposals for renewable volume obligations for 2021 and 2022, and a possible proposal to draw back on 2020 volumes.

In recent weeks various media outlets have reported the Biden administration may be cutting RFS volumes below statutory levels, in response to lower gasoline demand during the COVID-19 economic shutdown.

In an intent-to-sue letter to Regan, Growth Energy said the EPA has not followed the law.

"Under the Clean Air Act, 'EPA must by Nov. 30 of each year calculate and promulgate 'renewable fuel obligations that' will 'ensure that the program's requirements are met' in the upcoming year," the group said.

"Accordingly, EPA is required to issue the renewable fuel obligations for 2022 by Nov. 30, 2021. As of today -- 28 days before the statutory deadline -- EPA has not even issued a notice of proposed rulemaking to establish those obligations. Administrative agencies usually provide a comment period of 30 days or more; historically, EPA has provided more than 40 days and usually more than 50 days to comment on proposed RFS rules.

"Additionally, EPA is barred from issuing the final rule until at least 30 days have passed since the closure of the comment period. Consequently, at this point, it is impossible for EPA to issue the 2022 renewable fuel by the statutory deadline," said the group.

The EPA sent a proposed RFS rule to the Office of Management and Budget on Aug. 26, launching an official interagency review.

Growth Energy CEO Emily Skor said during a press call on Tuesday the agency's lack of action comes at a critical time.

"It's unfortunate we've gotten to this point," she said.

"We've got surging fuel costs, we've got rising emissions, and we really cannot afford to hold back lower-cost, lower-carbon biofuels with needless regulatory uncertainty. So, it is critical that EPA issue these RVOs. Quite honestly, if there's a further delay, EPA is missing a critical opportunity to address our climate challenge, provide consumers with continued lower carbon choices at the pump, and contribute to the rural economy."

It isn't the first time the ethanol industry has experienced RFS delays. The Obama administration delayed volume releases in both 2014 and 2015.

"They issued three RVOs in one year that caused a great deal of stress and uncertainty in the marketplace, as well as for producers," Skor said.

"And the result of those delays was an RFS simply reflecting obligated parties' actual blending practices. That is not how the RFS is supposed to work. Failure to meet deadlines have consequences. Marketplace uncertainty for producers and obligated parties and establishing market-forcing requirements with a goal of increasing volumes over time. We've already lost two years and advancements in renewable fuel blending. We can't afford that again," said Skor.

The Clean Air Act requires RFS volumes set for calendar years. The EPA has fallen so far behind that it was required by Monday to set 2023 volumes.

"But EPA has not done so, in violation of the statutory deadline," Growth Energy said in its letter.

"In fact, EPA has not even issued a notice of proposed rulemaking to establish those applicable volumes. EPA's failure to timely perform these mandatory, non-discretionary duties not only violates the Clean Air Act, but also undermines Congress's intention that the RFS program 'force the market to create ways to produce and use greater and greater volumes of renewable fuel each year' and deprives market participants of the 'market certainty' that is 'so critical to the long-term success of the Renewable Fuel Program.'"

Growth Energy called for EPA to issue the 2022 and 2023 volume obligations promptly, or face a lawsuit within 60 days. The letter said Growth Energy members depend directly on the annual RFS obligations issued by EPA.

EPA is required to set RFS volume at least 14 months prior to the calendar year when they are to take effect. EPA is required by law for each year starting in 2023, to set the volume of advanced renewable fuel at least at the same percentage as the volume of the total renewable fuel requirement established in 2022.

Read more on DTN:

"EPA Sends RFS Volumes Proposal to OMB,"…

"EPA to Propose Lower RFS Blend Volumes,"…

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Todd Neeley

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