U.S. biofuel coalition escalates legal attack on EPA blending waivers

Source: By Stephanie Kelly, Reuters • Posted: Tuesday, December 8, 2020

NEW YORK (Reuters) – A coalition of U.S. biofuel groups announced on Tuesday it had filed a brief with the D.C. Circuit Court of Appeals challenging the Trump administration’s decision in 2019 to grant 31 oil refineries exemptions from U.S. biofuel blending obligations.

The brief borrows arguments from a successful case that several members of the group had filed in the Tenth Circuit Court of Appeals. That case spurred controversy this year when the court sided with the biofuel industry and cast doubt on the legitimacy of the waiver program.

The biofuel industry claims the waivers hurt demand for corn-based ethanol; the oil industry disputes that and says the exemptions are needed to keep small refineries afloat.

Under U.S. law, refiners must blend billions of gallons of biofuels into their fuel, or buy tradable credits from those that do. Small refiners have sought and obtained exemptions to the requirements if they prove compliance would cause them financial harm.

In the most recent brief, groups including the Renewable Fuels Association, National Corn Growers Association and the National Farmers Union said the EPA lacked the authority to issue the 31 small refinery exemptions for the 2018 compliance year because they had not been granted continuously in the preceding years, according to the brief dated Dec. 7.

The Tenth Circuit had ruled in January in a narrower case that any small refinery waiver granted by EPA after 2010 must be an extension to a previous year’s exemption.

Most recipients of waivers in recent years have not continuously received them year after year. While the biofuel industry has called for EPA to apply the Tenth Circuit Court ruling broadly, the agency has yet to do so and is still contemplating pending petitions for the 2019 and 2020 compliance years.

Reporting by Stephanie Kelly; Editing by David Gregorio