NDFU applauds court decision on ethanol production waivers

Source: By Jamestown Sun • Posted: Tuesday, January 28, 2020

The Tenth Circuit found that the Environmental Protection Agency’s granting of small refinery exemptions to three companies owned by CVR Energy and HollyFrontier was unlawful and exempted them from meeting required levels of biofuel production under the nation’s Renewable Fuel Standard (RFS).

“I hope the court’s decision signals an end to EPA’s abuse of the small refinery waiver process,” Watne said. “These waivers reduced ethanol production by about 4 billion gallons in three years, destroying demand for corn in the process. This has hurt farm income, the environment, and rural communities.”

Watne said the court ruling stems from a May 2018 challenge brought against EPA by the National Farmers Union, Renewable Fuels Association, National Corn Growers Association and the American Coalition for Ethanol.

Among their findings, the court held that EPA cannot “extend” exemptions to any small refinery that had a temporary exemption lapse. EPA’s own data showed that a maximum of seven small refineries qualified for continuous extensions. Yet EPA has granted as many as 35 waivers in a single year.

Additionally, the court found that EPA abused its discretion in failing to explain how the agency could conclude that a small refinery might suffer a disproportionate economic hardship under RFS requirements, when EPA has simultaneously and consistently maintained that costs for RFS compliance credits, or RINS, are passed through and recovered by those same refineries.