US Appeals Court Rejects EPA’s Denial of Small Refinery Biofuel Waivers
Refiners Win Legal Battle Over Biofuel Mandates
A U.S. appeals court ruled against the Biden administration’s decision to deny small refiners “hardship waivers” exempting them from the nation’s biofuel mandates. The decision was a significant victory for the refining industry.
EPA’s Denial Overturned
In July, the Environmental Protection Agency (EPA) rejected nearly all pending petitions from oil refiners seeking exemptions from blending ethanol and other biofuels into their fuel, citing financial hardship. The U.S. Court of Appeals for the Fifth Circuit sided with the refineries that challenged the EPA’s decision, including Ergon, Calumet Shreveport, and Placid.
Court’s Rationale
In a 38-page decision, the court criticized the EPA’s rejection of the waiver requests, deeming it “impermissibly retroactive; contrary to law; and counter to the record evidence.” Under the Renewable Fuel Standard (RFS), oil refiners are required to blend biofuels into the nation’s fuel mix or purchase tradable credits from those that do. The EPA can grant exemptions to small refiners if they prove that the obligations cause them undue harm.
Industry Battle
The biofuel industry, particularly producers of corn-based ethanol, has long opposed the small refinery waiver program, arguing that it disproportionately benefits the oil industry at the expense of American farmers. Refiners, on the other hand, have contended that the ethanol mandates impose unfair costs on fuel producers and pose a threat to the viability of small plants.
Implications
The ruling has significant implications for the biofuel and refining industries, with potential repercussions for both sectors. The ongoing battle between these industries underscores the complex interplay of economic, environmental, and regulatory factors shaping the future of fuel production in the United States.
