Biofuels Groups File Opening Supreme Court Brief on Small Refinery Exemptions

(Renewable Fuels Association) The Renewable Fuels Association and Growth Energy today filed their opening brief in the U.S. Supreme Court in Environmental Protection Agency v. Calumet Shreveport Refining, LLC, Case No. 23-1229. The case seeks to overturn an opinion from the U.S. Court of Appeals for the Fifth Circuit regarding the proper venue for adjudicating the U.S. Environmental Protection Agency’s (EPA’s) denials of several petitions for small refinery exemptions (SREs) under the Renewable Fuel Standard (RFS).

In their brief, RFA and Growth Energy argue that the Fifth Circuit had erred and that challenges to those SRE petition denials should be adjudicated solely in the U.S. Court of Appeals for the D.C. Circuit because EPA’s SRE policy is “nationally applicable” and “based on a determination of nationwide scope or effect.” In support, the organizations argue in their brief that EPA “prescribed general standards” for adjudicating SRE petitions irrespective of their location that, when applied, “inherently affect . . . obligations for all” obligated refineries and renewable fuels producers “throughout the country.”

“EPA’s actions in response to these SRE petitions reflect quintessentially national concerns that are well within EPA’s authority to protect,” said RFA and Growth Energy in a statement. “Oil industry interests should not be allowed to upend Congress’s carefully crafted judicial review process, which ensures national uniformity for the RFS program and avoids inconsistent legal precedents, forum shopping, and market uncertainty for biofuels.”

The Renewable Fuel Standard was first enacted in 2005 as part of the Energy Policy Act. It was then expanded in 2007 with the passage of the Energy Independence and Security Act. It sets the number of gallons of renewable fuels that must be blended into the nation’s total fuel supply each year. The RFS remains one of America’s most successful clean energy policies, reducing carbon emissions, offering consumers more affordable options at the pump, and delivering greater energy security for more than 15 years.

In April and June 2022, EPA denied 105 SRE petitions from 36 refineries located in 18 states. In assessing the petitions, EPA applied a single, nationwide legal requirement: to be eligible for an SRE, petitioning refineries must demonstrate a direct causal relationship between RFS compliance and their claimed economic hardship. EPA then invited petitioning refineries to submit refinery-specific evidence to rebut EPA’s general factual finding that refineries have the ability to pass through their costs of compliance with the RFS and that RFS compliance does not cause refineries to incur any net costs, let alone economic hardship. Reviewing the evidence submitted by the refineries, EPA found that none met their burden.

Refineries whose SRE petitions were denied challenged the denials in the Third, Fifth, Seventh, Ninth, Tenth, Eleventh, and D.C. Circuits. All regional circuit courts except the Fifth Circuit concluded that only the D.C. Circuit was the proper venue to hear the challenges, and they dismissed or transferred the challenges to the D.C. Circuit. By contrast, the Fifth Circuit held that venue in that court was proper, and in a divided 2-1 panel opinion, vacated EPA’s denials for the refineries that brought challenges in that court.

In May 2024, RFA and Growth Energy jointly petitioned the Supreme Court to overturn the Fifth Circuit opinion. The U.S. EPA also petitioned the Supreme Court as well. On October 21, the Supreme Court granted EPA’s petition, and RFA and Growth Energy submitted their opening brief as a respondent in support of EPA. READ MORE

Excerpt from E&E News Greenwire: In a brief filed Friday, federal attorneys representing EPA made the case that the agency’s denial of 105 requests from small oil refineries for exemptions from the renewable fuel standard was a decision with national implications and must therefore be reviewed by the U.S. Court of Appeals for the District of Columbia Circuit, as required by the Clean Air Act.

EPA said that although five other regional appeals courts agreed to transfer challenges against the denials back to the D.C. Circuit, a refusal by the 5th U.S. Circuit Court of Appeals to do the same has opened the agency to “fragmentation of judicial review.”

“That would create a bifurcated RFS program consisting of one program for remanded petitions for most of the nation, and a separate, more favorable program for exemption claimants in the Fifth Circuit,” EPA wrote. “That result is contrary to Congress’s direction to ensure a uniform, nationwide framework for increasing renewable fuel use.” READ MORE