EPA Seeks Remand Of Trump-Era RFS Waivers, Opening Door To New Policy

Source: By Stuart Parker, Inside EPA • Posted: Monday, August 30, 2021

EPA is asking a federal appeals court to voluntarily remand Trump-era decisions that granted 31 small refinery waivers from renewable fuel standard (RFS) compliance and denied a smaller number of waiver requests, opening the door for the Biden administration to overhaul the agency’s waiver policies in light of recent court rulings.

In an Aug. 25 motion filed in the consolidated suit Sinclair Wyoming Refining, v. EPA, the agency asks the U.S. Court of Appeals for the District of Columbia Circuit for remand without vacatur of an August 2019 agency memorandum that granted 31 waivers and denied five more for the 2018 RFS compliance year.

“Given that EPA wishes to reconsider its Decision, remanding to EPA without vacatur would serve important jurisprudential interests by allowing EPA the first opportunity to address the varying arguments advanced by Petitioners and the appropriate administrative remedy,” EPA says. Biofuels groups wish to overturn the 31 waiver approvals, while refiners fault EPA’s waiver denials.

The agency says it needs to review the memo in the light of a January 2020 ruling by the 10th Circuit on small refinery waivers, and a June 25 decision by the Supreme Court reversing that decision in part. The 10th Circuit held in Renewable Fuels Association (RFA) v. EPA that small refineries that lacked exemptions in the past cannot claim them now, but the Supreme Court in HollyFrontier Cheyenne Refining, LLC, et al. v. Renewable Fuels Association, et al rejected this conclusion.

However, two key grounds the 10th Circuit cited to support scrapping three small refinery waivers did not feature in the high court ruling. The regional court found that waivers can only be justified by economic harm directly caused by the RFS, and that EPA in granting the three waivers failed to explain its apparent abandonment of an earlier position that refiners pass through the costs of RFS compliance to their customers, and so are not harmed.

The request comes as EPA is also faced with dozens of remaining undecided requests for small refiner waivers and as the agency is considering its overall policy on the economic hardship exemptions.

President Joe Biden criticized the Trump administration for granting the waivers in much greater numbers than the Obama administration did, and biofuels groups blame the waivers for “destroying demand” for their product.

EPA says, “voluntary remand without vacatur will allow EPA the opportunity to reconsider its action in light of these intervening decisions. In light of Petitioners’ arguments in their merits briefs regarding the sufficiency of the administrative record for the Decision, EPA also seeks an opportunity to consider whether to provide a more robust explanation for any action that it takes on remand.”

The agency adds, “EPA plans to consider what, if any, impact the remaining holdings in the Tenth Circuit’s decision may have on EPA’s implementation of the small refinery exemption provision generally, and what, if any, resulting impact that may have on the small refinery petitions adjudicated in the Decision and challenged here.”

Biofuels groups oppose remand without vacatur, which would leave the 31 waivers in place.

But EPA defends its request, saying, “if the Court were to vacate the grants in the Decision as requested by the Biofuels Petitioners, thirty-one small refineries currently exempted from RFS compliance for 2018 would suddenly be non-compliant with their 2018 RFS obligations.”

Further, remanding waiver denials without vacatur “would have no benefit for those refineries because they would still receive no immediate relief without further agency action. These small refineries have already complied with their 2018 RFS obligations,” EPA says. — Stuart Parker (sparker@iwpnews.com)