U.S. Court Strikes Down Three Small Refinery Exemptions

DENVER, CO – Late last week, the 10th Circuit Court of Appeals here ruled against the Environmental Protection Agency’s (EPA) use of small refinery exemptions (SRE’s) under the Renewable Fuels Standard (RFS). Specifically, the Court held that EPA cannot “extend” exemptions to any small refineries whose earlier, temporary exemptions had lapsed. According to the Court’s opinion, “the statute limits exemptions to situations involving ‘extensions,’ with the goal of forcing the market to accept escalating amounts of renewable fuels over time. None of the three small refineries consistently received an exemption in the years preceding its petition. The EPA exceeded its statutory authority in granting those petitions because there was nothing for the agency to ‘extend.’ EPA’s own data show that a maximum of only seven small refineries could have received continuous extensions of their previously existing exemptions. Yet, recently EPA has granted as many as 35 exemptions in a single year. The court ruling stems from a 2018 challenge brought against EPA by the Renewable Fuels Association (RFA), the National Corn Growers Association (NCGA), the American Coalition for Ethanol (ACE) and National Farmers Union (NFU).