EPA, CBD reach proposed settlement over RFS ESA review

The U.S. EPA on April 17 announced plans to comply with the consultation requirements of the Endangered Species Act as part of its upcoming Renewable Fuel Standard “set” rule under a proposed settlement agreement related to a legal challenge filed by the Center for Biological Diversity.

CBD in July 2022 filed a petition for review in the U.S. District Court for the District of Columbia alleging that the EPA failed to comply with the requirements of the ESA, the Clean Air Act, and the Administrative Procedures Act in promulgating a final rule in June 2022 that set RFS renewable volume obligations for 2020, 2021 and 2022.

The ESA requires that that federal agencies, including the EPA, work with the U.S. Fish and Wildlife Services or the National Marine Fisheries Service to ensure that actions authorized, funded or carried out by the agency are not likely to jeopardize the continued existence of any endangered or threatened species or result in the destruction or adverse modification of designated critical habitat for endangered or threatened species.

Under the proposed settlement agreement, the EPA would commit to compete an ESA consultation for its upcoming RFS “set” rule, which is expected to set RVOs for 2023, 2024 and 2025. The EPA released its proposed RFS "set" rule in December 2022. A public comment period on the rulemaking closed Feb. 10. The EPA is required to finalize the RFS “set” rule by June 14 under a consent decree agreement related to a separate lawsuit filed against the agency by Growth Energy.

If either the Fish and Wildlife Service or the National Marines Fisheries Service issues a biological option in connection with the ESA consultation, EPA would also agree to issue a determination addressing any conservation recommendations, terms and conditions of any incidental tax statement, and/or reasonable and prudent alternatives within the time frames set forth in that biological option, according to the agency. In turn, CBD would agree to dismiss with prejudice its challenge to the 2020-2022 RFS rule.

Growth Energy has welcomed news of the proposed settlement agreement. “Extensive research has shown that the RFS achieves its goal of lowering carbon emissions without causing land use or other environmental changes that impact endangered species,” said Emily Skor, CEO of Growth Energy. We look forward to EPA performing its own assessment under the terms of the settlement and reaching the same conclusion. We welcome the news that CBD and EPA have reached a settlement on CBD’s pending lawsuit on the 2020-2022 renewable volume obligation (RVO) ‘Reset’ rule, and remain focused on ensuring that EPA finalizes the RFS ‘Set’ rule for the 2023-2025 RVOs in accordance with our June 14 consent decree with EPA.”

A public comment period on the proposed settlement agreement is open through May 17. Additional information is available on the Federal Register website.