Emergency Petition Filed to Stop EPA From Granting Small-Refinery Exemptions

Source: By Todd Neeley, Dan Staff Reporte • Posted: Wednesday, January 20, 2021

The Renewable Fuels Association filed an emergency petition with the U.S. Court of Appeals for the District of Columbia Circuit, asking the court to stop the EPA from granting three small-refinery exemptions to the Renewable Fuel Standard issued on Tuesday evening.

“EPA’s decision will inflict substantial, immediate and irreversible harm,” on ethanol producers, the emergency motion said.

“This would be devastating to America’s ethanol producers, many of which are already on the brink of closure due to the ongoing impact of the COVID-19 pandemic.”

The agency granted three waivers, two for 2019 and one for 2018. The EPA still has 30 exemption requests pending for 2019. The 2018 exemption was previously denied by the agency.

According to information on EPA’s RFS dashboard, the 2019 exemptions reduced biofuel volumes by about 150 million gallons, while the 2018 exemption erased about 110 million gallons.

“The total eliminated volume of 260 million gallons is equivalent to shutting down three or four ethanol plants for a full year, or akin to erasing the total statewide annual ethanol consumption from Maryland, Massachusetts or South Carolina,” RFA said in a news release on Wednesday.RFA President and Chief Executive Officer Geoff Cooper said the exemptions issued were “without legal merit.”

“We took this action immediately to prevent the agency from doing further economic damage to an industry already reeling from the impacts of COVID-19,” he said in a statement.

“To avert additional harm to the ethanol industry, EPA must be prevented from returning any compliance credits (renewable identification numbers) to the unidentified refiners who were given these last-minute exemption handouts.”

Last week, members of Congress and the biofuels industry were scrambling over EPA Administrator Andrew Wheeler potentially reversing course and approving more renewable fuel exemptions for small petroleum refiners in the last days of the Trump administration.

EPA’s new rule proposal published in the Federal Register would grant refiners more flexibility and an extension to comply with the RFS for 2019 and 2020.

Under the proposal, refineries producing less than 75,000 barrels of oil per day would have until Nov. 30, 2021, to meet 2019 RFS blend requirements, and until Jan. 31, 2022, to meet the 2020 RFS obligations. EPA cited the economic struggles of refineries as a result of COVID-19 for the reason for the extensions.

In its proposed rule, EPA pointed to the benefits to refiners from delaying their blend requirements for 2019 and 2020. But the extension proposal does not mention any impacts those delays could have on ethanol producers or demand for feedstocks such as corn or soybean.

Todd Neeley can be reached at todd.neeley@dtn.com