Appeals court strikes down E15 waiver

Source: By Spencer Chase, Agri-Pulse • Posted: Monday, July 5, 2021

A major Trump administration action to expand the availability of higher blends of biofuels suffered a significant legal setback Friday that could lead to a fresh moratorium on summertime sales of 15% ethanol blends.

In a 3-0 decision, a panel of federal judges for the D.C. Circuit ruled the legislative text in the law underwriting the nation’s biofuel mandate is insufficient to support a regulatory waiver authored by the Trump administration that allowed E15 to be sold during the summer driving season. Under the Clean Air Act, a Reid Vapor Pressure waiver was needed for that sales expansion, but attorneys for the American Fuel and Petrochemical Manufacturers argued the law limited such leniency to a 10% ethanol blend.

In an opinion authored by Circuit Judge Judith Rodgers, the court said the legislative history “is silent” on why Congress opted to use that particular language specifically citing a 10% blend, and “the ambiguous history hardly suffices to overcome the plain text.”

In a statement, AFPM President and CEO Chet Thompson praised the court’s decision.

“We are glad the Court unanimously found that EPA lacks the authority to grant an RVP waiver to fuel containing more than 10 percent ethanol, consistent with how EPA interpreted its authority for nearly 30 years prior,” he said. “There is no ambiguity in statute and the previous administration’s reinterpretation overstepped the will of Congress.”

The case stems from a 2019 rollout of the necessary fuel volatility waiver by the Trump administration, a move that came just before the beginning of the summer driving season that had previously been closed off to E15 sales in most areas. In oral arguments in April, attorneys grappled over the legislative text, with oil groups arguing Congress did not say “at least 10%” in the part of the statute discussing the waiver.

Several biofuels groups intervened in the case, seeking to backstop the efforts of the Environmental Protection Agency and Department of Justice in defending the waiver. In a joint statement, the National Corn Growers Association, Renewable Fuels Association, and Growth Energy said they “disagree with the court’s decision” and said it could “deprive American drivers of lower carbon options at the pump.”

“We are pursuing all available options and will work with the administration and our congressional champions to ensure that we have a solution in place before the 2022 driving season,” the groups noted.

Joe Kakesh, general counsel for Growth Energy, tells Agri-Pulse the fuel can still be sold to motorists since several legal steps must take place before the opinion is enforced. The case could be appealed and petitioned for an en banc hearing before the entire circuit; absent that effort, the opinion would still need to be turned into an actionable mandate that would direct the EPA to act in a way that satisfies the court’s ruling.

In the meantime, Kakesh said “one of the many options we are exploring” to allow the sales to continue could potentially be codifying the RVP waiver into law, something that would require an act of Congress.

The ruling is the second major decision against the biofuels industry in as many weeks. Last Friday, the Supreme Court ruled in favor of small refineries in a major case concerning the awarding of Small Refinery Exemptions from the Renewable Fuel Standard. Biofuel groups, however, say the high court struck down one key aspect of their case — that a waiver needs to be issued continuously — but other factors that should limit the awarding of future waivers remain in place.

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