Biofuels coalition files brief challenging 31 SREs granted August 2019 for 2018 RFS compliance year

Growth Energy, Renewable Fuels Association, National Corn Growers Association, National Biodiesel Board, American Coalition for Ethanol, and National Farmers Union filed a brief Dec. 7 challenging U.S. EPA’s August 2019 decision to exempt 31 small refineries from their obligations to comply with the Renewable Fuel Standard in 2018. Collectively known as the “biofuels coalition” for this case, the group submitted its filing to the D.C. Circuit Court of Appeals, arguing that EPA lacked the authority to issue such exemptions and that it acted in an arbitrary and capricious manner in attempting to do so.

In its brief, the Coalition asserts some of the same arguments that the Renewable Fuels Association, NCGA, NFU, and ACE successfully made in the Tenth Circuit Court of Appeals against three small refinery exemptions, including the fact that EPA lacked the authority to extend small refinery exemptions that had lapsed in earlier years. The coalition also took on EPA’s failure to provide its own refinery-by-refinery analysis to support a finding of a disproportionate economic hardship, particularly in the 20 instances where EPA decided to grant a full exemption despite the U.S. DOE recommending that only a partial exemption be granted. In addition, the coalition posed the same question on which the Tenth Circuit found EPA inexcusably silent: If all RFS compliance costs are ultimately passed through to end users and recovered, as EPA has repeatedly maintained, how is it that any small refinery can suffer a disproportionate economic hardship?

“Among all of EPA’s indefensible actions surrounding small refinery exemptions in recent years, the agency’s two-page decision to grant 31 waivers from 2018 RFS compliance really takes the cake,” coalition representatives said. “Enough is enough. The EPA had absolutely no legal basis for continuing to destroy demand for renewable fuels, which is contrary to the intent of Congress for the RFS program. When it adopted the RFS in 2005, Congress clearly intended for small refinery exemptions to be temporary in nature. Yet, 15 years later, some refiners—most of whom have readily complied with RFS obligations in the past—are trying to claim they need more time to prepare for compliance with RFS requirements. If these exemptions were meant to be a ‘bridge to compliance,’ as concluded by the courts, it should be obvious that we all crossed that bridge many years ago.”

In prior years, EPA would respond separately to each small refinery exemption petition with several pages of analysis on the individual refinery’s unique circumstances. However, for the 2018 exemptions, EPA announced its decisions on more than three dozen refinery petitions in a single, two-page memorandum issued by Anne Idsal, acting assistant administrator. That brevity alone reflects EPA’s reflexive reaction to exempt oil interests from compliance whenever they asked without justification.