EPA Supports 10th Circuit Court Ruling to Tighten Small Refinery Exemptions

February 22, 2021

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by Tyne Morgan (Ag Web) Renewable Fuels groups are celebrating an EPA win. More than a year after the 10th Circuit Court issued its initial ruling on the small-refinery provisions within the Renewable Fuels Standard (RFS), EPA announced Monday it’s supporting the court’s ruling. As a result, there will be tighter restrictions on issuing such waivers.

The 10th Circuit Court of Appeals ruled in January 2020 that Small Refinery Exemptions (SREs) can only be used as extensions for refineries that had secured them continuously each year since 2010. That standard excluded all but two refineries from consideration for future waivers.

In a release issued Monday, the EPA said, “This conclusion, prompted by a detailed review following the Supreme Court’s grant of certiorari in the case, represents a change from EPA’s position before the Tenth Circuit. The change reflects the Agency’s considered assessment that the Tenth Circuit’s reasoning better reflects the statutory text and structure, as well as Congress’s intent in establishing the RFS program.

Despite the EPA’s change in position, the administration of the Small Refinery Exemptions is still up in the air. The oil industry has appealed the 10th circuit ruling and the Supreme Court has consented to take up the case. The Court will likely hear arguments in April.

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While the full Senate still hasn't scheduled a vote to confirm President Biden's pick to lead EPA, Michael Regan received committee approval earlier this month. During his confirmation hearing, Regan promised to restore integrity to the RFS.

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Growth Energy also provided more background on the case.

"HollyFrontier v. Renewable Fuels Association (Case No. 20-472) is challenging the Tenth Circuit decision (Renewable Rules Association v. EPA, Case No. 18-9533). In January 2020, the lower court rightly found that the plain language of the Renewable Fuel Standard (RFS) required refineries to have been granted small refinery exemptions (SREs) in all prior years as a condition of eligibility for any additional SREs." READ MORE

EPA Signals New Position on Small Refinery Exemptions: After Careful Consideration, EPA Supports Tenth Circuit’s Renewable Fuels Association Decision (Environmental Protection Agency)

Farm, Biofuel Leaders Embrace EPA’s New Position on Tenth Circuit’s Small Refinery Waiver Decision (Renewable Fuels Association)

EPA Changes Course on RFS Exemptions: EPA Changes Policy, Now Sides With Biofuels Industry on SREs (DTN Progressive Farmer)

EPA FLIPS ON BIOFUEL WAIVERS: (Politico's Morning Energy)

Biden administrations supports court's restrictions for biofuel exemptions (The Hill)

EPA changes position, supports Tenth Circuit Court’s SRE ruling (Biomass Magazine)

EPA changes stand, sides with ethanol industry in court case (Associated Press)

U.S. EPA says it agrees with court's decision casting doubt on biofuel exemptions (Reuters)

Biden admin sides with biofuel industry in court case (E&E News)

EPA says it now ‘agrees’ with 10th Circuit waiver ruling (Agri-Pulse)

EPA Supports 10th Circuit Decision (Energy.AgWired.com)

Biden EPA Backs Limiting Biofuel Quota Waivers for Refineries (Bloomberg)

Grassley pleased EPA sides with biofuels in critical RFS case (SouthernMinn.com)

EPA AGREES RFS EXEMPTIONS SHOULD BE TIGHTLY LIMITED (Successful Farming)

EPA signals new position on ethanol waivers (Farm Progress)

EPA sides with ethanol industry in court case (KCCI)

Grassley pleased EPA sides with biofuels in critical RFS case (SouthernMinn.com)

State leaders laud EPA support of biofuels ruling (Grand Island Independent)

Co-op to SCOTUS: Closure Without SREs: CountryMark Tells SCOTUS Farmer-Owned Cooperative Would Face Financial Ruin Without RFS Exemptions (DTN Progressive Farmer)

Excerpt from Politico's Morning Energy: Now what? EPA's decision to wait on the pending requests for exemptions could force refineries to make difficult decisions on how to comply with the program, Eric reports. The companies face a compliance deadline for 2020 at the end of March, and refineries typically need to know by then whether they have received exemptions before they submit the required number of credits.

"EPA's decision doesn't just abandon facilities that have, until this point, always been considered energy and national security assets, it will also inflate the cost of RFS compliance credits for every obligated party — making it harder for U.S. fuel manufacturers to stay in operation," said a spokesperson for the American Fuel and Petrochemical Manufacturers, which backs refiners. READ MORE