Biofuel groups file challenge to E15 court ruling

Source: By Jacqui Fatka, Farm Progress • Posted: Wednesday, August 18, 2021

Court asked to rehear case which eliminated use of E15 year-round use and detail market impacts.

Growth Energy, the National Corn Growers Association and the Renewable Fuels Association filed a petition for rehearing with the D.C. Circuit Court of Appeals regarding the recent American Fuel & Petrochemical Manufacturers, et al. vs. EPA decision, in which the court vacated a 2019 regulation allowing year-round sales of a 15% ethanol fuel blend. The petition asks the full court to rehear the case because what they note are “significant legal errors” in the three-judge panel’s decision, handed down on July 2nd.

In their latest petition they state, “Because of its higher ethanol content and lower RVP, E15 better achieves Congress’s environmental, economic, and security goals than E10. The panel decision, however, effectively bars E15 from being used in the summer, relegating the country to using only E10 and depriving it of E15’s many added benefits. The full Court should grant rehearing to correct the panel’s errors.”

In June 2019, EPA issued its final rule extending the Reid Vapor Pressure, or RVP, volatility waiver to E15, and found that E15 is substantially similar to E10 certification fuel, allowing the fuel to be sold year-round in conventional gasoline markets. Oil refiners soon challenged the rulemaking in the D.C. Circuit Court of Appeals.

Together, the three national organizations stated: “If allowed to stand, this court’s decision to vacate EPA’s rulemaking to allow E15 to be sold year-round will have devastating consequences for the market expansion of homegrown biofuels.”

Related: E15 court ruling could stall future ethanol demand growth

According to an analysis of the impact of the E15 ruling prepared by RFA, E15 sales volumes in 2022-2024 would remain essentially flat with 2021 levels, rather than growing rapidly as expected prior to the court decision. Cumulative E15 sales between 2021 and 2024 would be nearly 12.6 billion gallons lower than would have been the case if E15 can be sold year-round.

“This leads to a net loss of ethanol sales of 630 million gallons valued at $1.3 billion between 2021 and 2024,” Richman writes.

In addition, the ethanol industry would reduce purchases of corn by approximately 221 million bushels between 2021 and 2024, leading to more than $1 billion in lost sales revenues for farmers, valued at today’s prices.

“Petitioning for a rehearing is a critical next step in giving biofuel producers and farmers a fair shot in the marketplace and providing American drivers with better access to cleaner fuel choices. We are hopeful that the full court takes up the petition and reverses the panel’s decision,” the groups say.

On Aug. 21, 2020, Growth Energy, RFA and NCGA filed a brief as intervenors in the oil industry’s lawsuit against EPA’s regulation allowing year-round E15. The brief provided support for EPA’s position that parity in RVP regulations for E10 and E15 is consistent with the provisions of the Clean Air Act and the congressional intent behind those provisions. The organizations further pointed out that extending the volatility waiver from E10 to E15 is appropriate because the volatility of the fuel actually decreases as more ethanol is added into gasoline beyond E10.

Growth Energy, NCGA and RFA participated in oral arguments for the case on April 13, 2021.