Growth Energy Settles With EPA on RFS

LINCOLN, Neb. (DTN) -- Any hopes by biofuels producers for the EPA to finalize already-late Renewable Fuel Standard volumes this spring may have ended, as the agency struck a settlement with Growth Energy this week that requires EPA to finalize 2021 and 2022 volumes by June 3.

With a number of outstanding lawsuits and threats of lawsuits pending, Growth Energy announced the settlement on Tuesday as the biofuels industry waits for EPA to finalize a broad set of RFS actions announced in December.

The settlement, which is scheduled to post to the Federal Register on Wednesday, will be subject to a 30-day public comment period.

Growth Energy filed a complaint on Feb. 8 in the U.S. District Court for the District of Columbia as part of the settlement process.

In that complaint, Growth Energy sued the agency for missing RFS deadlines.

"This agreement is a significant milestone for the biofuels industry and reflects Growth Energy's persistent efforts to hold EPA accountable to its responsibilities under the RFS to issue timely RVOs and provide market certainty," Growth Energy CEO Emily Skor said in a news release.

"Furthermore, we are hopeful that EPA's agreement to submit to judicial oversight of a binding RVO deadline gives credence to the agency's commitment to get the RFS back on track and provide regulated parties and the biofuels industry with timely guideposts to enhance market certainty and incentivize innovation for the future of biofuels. This is particularly important as EPA moves to consider the blending obligations for the already-delayed RFS 'set' in the year ahead."

While Growth Energy lauded the settlement as a victory, the agency was statutorily required to finalize 2021 and 2022 volumes by Nov. 30, 2021.

The settlement, however, does not include EPA's proposal to reset already-finalized RFS volumes for 2020. In addition, the EPA could void the settlement.

"EPA or the Department of Justice may withdraw or withhold consent to the proposed consent decree if the comments disclose facts or considerations that indicate that such consent is inappropriate, improper, inadequate, or inconsistent with the requirements of the act," the agency said in the notice of the decree.

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.

In December 2020, Growth Energy submitted a notice of intent to sue EPA for failing to meet the statutory deadline for issuing the 2021 renewable volume obligations.

Late last year, Growth Energy submitted another notice of intent to sue EPA regarding its failure to timely issue the 2022 RVOs, as well as the "set" renewable fuel volumes for 2023.

The Biden administration announced on Dec. 7, 2021, proposed cuts to the RFS, the rejection of all pending small-refinery exemptions and the approval of federal aid to biofuel producers hurt by the COVID-19 economic shutdown.

The EPA proposal calls for retroactive cuts to the corn-ethanol portion of RFS volumes below 15 billion gallons at 12.5 billion for 2020 and sets the level at 13.32 billion for 2021.

The proposal delivered a victory to oil producers who have been asking for cuts to conventional ethanol for some time. The agency would then increase corn-ethanol volumes to 15 billion gallons in 2022.

The negative RFS news for biofuels and agriculture was offset by EPA's proposed rejection of the pending 65 small-refinery exemption requests for 2016 through 2021. As part of the announcement, EPA proposed a new method for determining who receives exemptions.

Read more on DTN:

"EPA Proposes Corn-Ethanol Cuts to RFS," https://www.dtnpf.com/…

"Growth Energy Signals Intent to Sue EPA," https://www.dtnpf.com/…

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

Follow him on Twitter @DTNeeley

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