Ethanol producers take low-carbon fuel standard fight to Supreme Court

Source: Debra Kahn, E&E reporter • Posted: Friday, March 21, 2014

Ethanol producers are taking their challenge of California’s low-carbon fuel standard to the Supreme Court.
The Renewable Fuels Association and Growth Energy are asking the nation’s highest court to rule on the constitutionality of California’s program, which assigns carbon scores to various fuels and requires fuel producers and importers to lower the average carbon content of their supplies.The 9th U.S. Circuit Court of Appeals declined in January to rehear a challenge to the standard, a key component of California’s suite of greenhouse gas-cutting policies. Industry groups had asked for a rehearing after a 9th Circuit panel reversed a lower court decision against the program.

“California, through adoption of the LCFS, has violated the most basic, structural features of interstate federalism,” Tom Buis of Growth Energy and Bob Dinneen of the Renewable Fuels Association said in a release today.

California’s Air Resources Board developed the greenhouse gas regulations in order to comply with the state’s landmark 2006 climate change legislation. The rules would cut carbon content in fuels sold in California by 10 percent by 2020.

In order to comply, a fuel blender must keep an average carbon intensity in its total volume produced below the board’s annual limit.

The industry groups have claimed that the measurement discriminates against out-of-state fuel makers by including transportation. That provision, they charged, violated the U.S. Constitution’s “dormant” Commerce Clause, which is generally interpreted to mean that while the clause gives Congress the authority to regulate interstate commerce, the inverse is also true — states may not restrict or discriminate against interstate economic activity.

In a 2-1 ruling, the court dismissed that argument in September (Greenwire, Jan. 22).

The petition claims that the LCFS will “Balkanize the national economy, pit States against each other, and allow the larger States to use their economic clout to force farmers and businesses in other States to conform to their idea of good policy — all while harming the Midwest ethanol industry. This Court’s immediate intervention is therefore needed to nip this so-called ‘experiment’ in the bud.”

Click here to read the petition for writ of certiorari.