Court Upholds 2019 RFS Volumes, Rejects Refiner Arguments

Cindy Zimmerman

A D.C. Circuit Court decision Friday upholds 2019 renewable fuel volumes under the Renewable Fuel Standard, while at the same time rejecting arguments from oil refiners that the RFS causes them economic hardship.

The National Biodiesel Board, one of the biofuels petitioners in the case challenging EPA’s failure to account for retroactive small refinery exemptions that undercut the annual volumes by 7% in 2019, expressed disappointment in the decision.

NBB Vice President for Federal Affairs Kurt Kovarik says the decision creates renewed uncertainty for the industry because it does not require EPA to account for retroactive exemptions. “Small refinery exemptions harm biodiesel and renewable diesel producers when they retroactively reduce demand for advanced biofuels,” he said. “On behalf of NBB’s members, I call on EPA to quickly issue the 2021 and 2022 RFS rules, provide a strong signal of growth for advanced biofuels like biodiesel and renewable diesel, and fully account for any small refinery exemptions it plans to grant—as it has already done in the 2020 RFS rule.”

Renewable Fuels Association President and CEO Geoff Cooper said they welcome the decision because of its outright rejection of arguments from oil refiners. “RFA was pleased to see the court methodically reject the refiners’ claims one by one, and this ruling should dispel the myth—once and for all—that the RFS somehow harms oil refiners.”

The court rebuffed the refiners’ argument that EPA should have waived the 2019 RFS requirements because East Coast refiners purportedly could not pass through their RFS compliance costs and thus experienced “severe economic harm.” According to the judges, “Obligated parties assert that the ‘pass-through’ theory is flawed and that RFS requirements impose severe economic consequences on refiners in the Eastern United States. We reject this challenge. EPA reasonably concluded that obligated parties had failed to make the strong causal showing required to trigger the waiver.” The court added, “It was reasonable for EPA to conclude that RFS costs alone were not the primary driver of the refineries’ economic difficulties.”

The decision also discards arguments from the refiners regarding the RFS point of obligation and treatment of exported renewable fuels.

Biodiesel, biofuels, EPA, Ethanol, Ethanol News, RFA