A Rewind on Circuit Court RFS Decision

Source: By Todd Neeley, DTN/Progressive Farmer • Posted: Tuesday, August 1, 2017

Without exception biofuels interest groups hailed a federal court decision as affirmation of what they believed all along: The U.S. Environmental Protection Agency could not legally cut biofuels volumes based on an “inadequate domestic supply” waiver provision in a three-year Renewable Fuel Standard finalized in 2016.

The U.S. Court of Appeals for the District of Columbia Circuit essentially ruled on Friday that EPA is to determine volumes based on actual production and not whether those gallons are getting to consumers.

While the court ruled specifically the waiver was no excuse for cutting volumes in 2016, the court also ordered the agency to review that particular RFS that included three years’ worth of volumes, 2014 to 2016 and 2017’s biomass-based diesel numbers.

So, such a review could mean the likes of the biodiesel industry could see a bump in the RFS volumes for those years retroactively, although it’s not yet clear what will happen at this point.

So far the EPA has not responded to DTN’s request for additional information.

Following is a sample of additional reaction to the court ruling that rolled in throughout the weekend.

-Donnell Rehagen, chief executive officer, the National Biodiesel Board: “Today’s decision from the D.C. circuit is welcome reassurance that EPA has the authority to increase volumes of biomass-based diesel. We must do so to advance the goals of the law. And as co-petitioners to the general waiver authority argument, we were pleased to see the court agreeing with our arguments.”

-Frank Macchiarola, downstream group director of the American Petroleum Institute: “EPA’s waiver was necessary to protect consumers from an outdated mandate that attempts to force the use of ethanol beyond the limits that the vehicle fleet and refueling infrastructure were designed to handle. Today’s decision reaffirms the need for congress to revisit and significantly reform the broken RFS program. The outdated goals of the ethanol mandate have led to implementation challenges for EPA and the refining industry.

“API had supported EPA basing its waiver on the broader negative economic consequences of the mandate, and as EPA considers implementing a revised and retroactive standard for 2014-2016, we will encourage EPA to reconsider this option.”

-Growth Energy Chief Executive Officer Emily Skor: “We’re very pleased with the court’s ruling, which restores Congressional intent and will ensure that renewable fuels continue to play a growing and important role in America’s fuel mix. This is a major win for consumers, who save money when American biofuels can compete at the pump with foreign oil. Every year, American biofuels get more affordable and more sustainable. Ethanol slashes greenhouse gas emissions by 43%, and biofuel production supports hundreds of thousands of jobs across the U.S. We appreciate the court recognizing the value of the RFS, and we look forward to working with the EPA to make sure that America’s biofuel targets reflect the goals set down in law.”

-POET Chief Executive Officer Jeff Broin: “Today’s decision is a victory for U.S. drivers and everyone who supports clean, American-made fuel. Congress clearly laid out its vision for increasing our nation’s use of American-made biofuels, and the biofuels industry has worked tirelessly to make that vision a reality. We must use every available gallon of clean, domestic biofuels in lieu of importing more oil. It’s environmentally responsible; it’s economically responsible; it’s common sense; and it’s the law. We hope this decision will help us move past the unjustified resistance to year-round use of E15 by those protecting oil markets and pave the way to the expansion of higher biofuel blends across the United States.

“Biofuels today replace toxic chemicals linked to cancer, developmental disorders and other health issues. Biofuels lower greenhouse gas emissions by at least 43% percent. Today’s decision will help to increase those benefits while lowering costs for consumers at the pump.”

-DuPont’s Global Business Director for Biofuels Jan Koninckx: “Today is a good day for biofuels. We look forward to working with EPA as the agency re-examines the renewable volume obligation rules on biofuels and translates the court’s decision into regulatory action. Consistent and long-term biofuels policy is critical to continued growth and investment in renewable fuels.”

-U.S. Sen. Joni Ernst, R-Iowa: “I was pleased the court rejected the EPA’s flawed methodology behind reducing the Renewable Fuel Standard’s renewable fuel volumes for 2016. Supplying enough renewable fuels has not been a problem for our farmers and biofuels producers, and the EPA’s use of ‘inadequate domestic supply’ waiver authority created needless uncertainty for the industry. Having a strong and long-term RFS is of critical importance to Iowa, as well as our nation, and I’m glad the court recognized this today.”

-Brian Jennings, executive vice president, American Coalition for Ethanol:

“ACE has consistently held firm that EPA does not have authority to use the so-called ‘blend wall’ excuse to reduce RFS volumes below statutory levels. Although we don’t yet know how EPA will handle the issue, the court victory is huge for establishing the precedent that the Clean Air Act cannot be used by EPA to ride brakes on ethanol use based on oil company market obstruction.

“ACE was the first organization to support enactment of the RFS in congress. The court decision is a win for the farmers, ranchers, Main Street businesses, scientists, investors, and renewable fuel producers who have worked hard to help EPA succeed in fulfilling the goals of the RFS. It’s also a win for consumers who deserve access to renewable fuels which are less expensive and cleaner than gasoline.”