Fifth Circuit Court Overrules EPA Denials on RFS Small-Refinery Exemption Requests
LINCOLN, Neb. – In a significant blow to the ethanol industry, the federal appeals court for the Fifth Circuit has struck down the Biden administration’s decision on small-refinery exemptions to the Renewable Fuel Standard (RFS). The court ruled on Friday that the Environmental Protection Agency’s (EPA) rejections of 31 exemptions in April 2022 and an additional 69 exemptions in June 2022 were not legally warranted. As a result, the court has remanded the EPA’s denial back to the agency for further proceedings.
The legal challenge was initiated by six small refineries – Calumet Shreveport Refining LLC, Placid Refining Company LLC, Ergon Refining Inc., and Wynnewood Refining Company LLC. The court criticized the EPA for deviating from its previous procedures when making these determinations.
The EPA denied petitioners’ years-old petitions using a novel CAA interpretation and economic theory that the agency published in December 2021. We conclude that the denial was (1) impermissibly retroactive; (2) contrary to law; and (3) counter to the record evidence. We grant the petitions for review, vacate the challenged adjudications, deny a change of venue, and remand, the Fifth Circuit stated in its ruling.
The Renewable Fuel Standard, established under the Clean Air Act, requires a certain volume of renewable fuel, such as ethanol, to be blended into transportation fuel each year. Small refineries can apply for exemptions from these obligations if they can demonstrate significant economic hardship.
The Fifth Circuit’s decision is seen as a major setback for the ethanol industry, which has long claimed that these exemptions are being overused and abused by larger refineries that do not genuinely meet the criteria for hardship.
Today’s ruling is a disappointing blow to the biofuels industry and rural America. It undermines the intent of the Renewable Fuel Standard and gives a green light to large refineries to continue circumventing their obligations, said Geoff Cooper, CEO of the Renewable Fuels Association, a leading trade association for the ethanol industry.
The court’s ruling may also have wider implications for the Biden administration’s commitment to combating climate change and transitioning to cleaner energy sources. The Renewable Fuel Standard is a key policy tool in driving the use of renewable fuels and reducing greenhouse gas emissions in the transportation sector.
The EPA will now be required to re-examine its denial of these small-refinery exemptions and potentially reassess its interpretation of the Clean Air Act. The agency will need to carefully consider the legal and practical implications of the Fifth Circuit’s ruling.
This latest decision by the Fifth Circuit Court underscores the ongoing tension between the ethanol industry and the oil refining sector. The ruling is likely to ignite further debate over the appropriate criteria for small-refinery exemptions and how they should be granted or denied in the future.
The court’s decision leaves the door open for potential reform of the small-refinery exemption program and further scrutiny of the EPA’s decision-making process. It may also spark renewed discussions regarding the overall effectiveness and fairness of the Renewable Fuel Standard.
As the case moves forward, the ethanol industry will continue to advocate for a level playing field and greater transparency in the small-refinery exemption process. The outcome could have lasting implications for the industry, the environment, and the nation’s energy policies moving forward.
Keywords: Fifth Circuit Court, EPA, RFS, small-refinery exemptions, renewable fuel standard, ethanol industry, Biden administration, Clean Air Act, legal challenge, Environmental Protection Agency, remanded, renewable fuels, economic hardship, greenhouse gas emissions, climate change, oil refining sector, reform, scrutiny, transparency, level playing field, national energy policies.
