EPA Reverses Course on Court-Defined Refinery Waivers

WASHINGTON, DC – Biofuel groups are applauding EPA’s latest decision to change course in a Tenth Circuit Court of Appeals decision on the interpretation of the small-refinery exemptions (SRE) in the renewable fuels standard (RFS). In January of 2020, the Tenth Circuit vacated three EPA decisions granting SRE petitions for two years, dating back to 2016, explaining that a refinery petition for exemption must satisfy two conditions: establish an existing exemption and demonstrate a disproportionate economic hardship caused by RFS compliance. The court also held that EPA had acted arbitrarily and capriciously by deviating, without a stated reason, from its prior position that refineries generally do not incur disproportionate economic hardship from purchasing renewable identification numbers (RINs) on the open market because the refineries “pass most or all of their RIN purchase costs” on to customers. The court also ruled that a small refinery that did not seek or receive an extension in prior years is ineligible for an extension because at that point there is nothing to extend. In a press release, EPA acknowledged the court’s decision that the exemption was intended to operate as a temporary measure and, consistent with that Congressional purpose, the plain meaning of the word “extension” refers to continuing the status of an exemption that is already in existence. The Supreme Court will still hear the case though after two small refiners appealed the decision and the High Court accepted the case.
(SOURCE: All Ag News)