D.C. Circuit stays RFS suit as EPA mulls reconsideration of 2020 rule

Source: By Inside EPA • Posted: Tuesday, August 24, 2021

The U.S. Court of Appeals for the District of Columbia Circuit has accepted EPA’s request to further delay litigation against the agency’s renewable fuel standard (RFS) for 2020 while the agency decides whether to reconsider the rule in the light of a recent high court ruling, rejecting biofuels groups’ motion to proceed with the case.

In a brief Aug. 19 order, the court grants continued abeyance until Sept. 9 in RFS Power Coalition, et al. v. EPA, a consolidated suit brought by refiners, biofuels groups, biogas producers and others against the agency’s rule setting biofuel blending volumes under the RFS for 2020.

The order responds to EPA pleas for more time to determine the implications of the Supreme Court’s June 25 ruling in HollyFrontier Cheyenne Refining, LLC v. Renewable Fuels Association, where the high court upheld small refiners’ ability to win RFS compliance waivers if they have not held a continuous line of such waivers previously.

In a July 26 motion, EPA said “[a] further abeyance in this case will thus allow EPA the opportunity to decide whether, pending the agency’s resolution of the remaining questions concerning small refinery exemptions, any reconsideration of the 2020 Rule is appropriate.”

The high court’s ruling reversed a 10th Circuit ruling on the waivers issue, but it did not address other arguments the 10th Circuit made in rejecting three EPA waivers for small refineries, such as EPA failed to explain sudden changes in its prior stance that refiners pass on the costs of RFS compliance to their customers, or that waivers must be granted only on the basis of economic hardship traceable directly to the RFS.

“If EPA decides that reconsideration is appropriate, then that reconsideration could narrow or moot issues that the Court would need to decide in this case,” EPA said.

These waiver questions are germane to the 2020 RFS volumes rule because EPA for the first time in that rule adjusted biofuel blending rates upward to reflect small refinery waivers it expected to issue in 2020. Yet EPA has yet to issue any such waivers for last year, and the agency is facing opposition from some oil sector groups in the RFS Power case to this decision.

Biofuels groups, meanwhile, support the decision, and biofuels sources tell Inside EPA they want the agency to take a similar approach when it belatedly sets blending volumes for 2021 and 2022, in a rulemaking due by statute to conclude by Nov. 30. EPA has yet to propose these rules, however, calling into question the agency’s ability to finalize them by the November deadline.

The court rejected biofuels petitioners’ request that the case be allowed to proceed under a briefing schedule that would have seen EPA submit its brief Oct. 1.