Last night, the Renewable Fuels Association, Growth Energy, National Corn Growers Association, National Biodiesel Board, American Coalition for Ethanol, and National Farmers Union opposed the U.S. Environmental Protection Agency’s (EPA) motion to remand but not vacate the 31 small refinery exemptions (SREs) the Trump Administration granted in August 2019. The coalition of biofuel and ag leaders is currently challenging the 31 SREs in the D.C. Circuit, arguing that EPA’s issuance of the exemptions was arbitrary and capricious and exceeded the Agency’s authority under the Clean Air Act.
Together, these leaders provided the following statement in opposition to this motion:
“While it is encouraging that EPA intends to reconsider the 31 SREs granted for the 2018 compliance year, we must oppose EPA’s motion to remand without a deadline and without addressing the SREs’ ongoing damage to the biofuel industry. In addition to seeking a remand of the SREs, the Biden Administration EPA should ask that they be vacated; or at the very least, EPA should ask the court to set a deadline by which the reconsideration of these petitions must be completed. This would allow the Biden Administration EPA to hit the reset button and conduct a new evaluation of each 2018 SRE request in light of the 10th Circuit Court decision in Renewable Fuels Association et al. v. EPA and the recent Supreme Court decision overturning one piece of the 10th Circuit decision. We are looking to the Biden Administration to renew the bond with farmers and rural economies by restoring certainty and integrity to the RFS.”
In August 2019, the Trump Administration’s EPA approved an unprecedented 31 SREs for the 2018 RVO compliance year with only a cursory, two-page decision. This coalition of biofuels and ag leaders filed a petition in the D.C. Circuit Court challenging EPA’s decision. The coalition asked the court to stay the 2018 SRE case in November 2019 pending the outcome of related litigation in both the 10th Circuit and D.C. Circuit Courts. In January 2020, the 10th Circuit ruled in Renewable Fuels Association et al. v. EPA et al. that EPA has no power to ‘extend’ an exemption that had lapsed. The Court also held that EPA lacks the authority to grant an exemption based on hardships not caused by RFS compliance, and also found that it was arbitrary and capricious for EPA to ignore its own prior studies showing that refiners recoup RFS compliance costs.
On June 25, 2021, in HollyFrontier v. Renewable Fuels Association, the Supreme Court vacated the 10th Circuit’s holding that EPA may only ‘extend’ continuously pre-existing exemptions. EPA nevertheless has had the opportunity to apply the other two 10th Circuit precedents not challenged in the HollyFrontier case and vacate the 31 SREs at issue in the D.C. Circuit. However, on August 25, 2021, EPA instead filed a motion to remand the SREs without vacatur, meaning that, if the motion is granted, the 31 SREs will stay in effect with no deadline or timeline for review or for resumption of the biofuel and ag leaders’ judicial challenge.