DC Court of Appeals upholds RFS RVOs for 2020-2022
May 15, 2024
BY Erin Voegele
The U.S. Court of Appeals for the District of Columbia Circuit on May 14 upheld the renewable volume obligations (RVOs) set by the U.S. EPA for Renewable Fuel Standard compliance years 2020, 2021 and 2022.
The EPA in June 2022 issued a final rule that set new RVOs for 2021 and 2022 and reduced the existing RVO for 2020. The agency retroactively reduced the 2020 RVO in response to market conditions caused by the COVID-19 pandemic.
A variety of oil groups challenged the rule, claiming the RVOs were too high. Biofuel groups also challenged the rule seeking higher cellulosic RVOs. The court ruled that the “EPA complied with the law and reasonably exercised its discretion in setting the renewable fuel requirements for the three years at issue.” As a result, the court has denied all the petitions for review.
The Renewable Fuels Association is welcoming the court’s decision. “Today’s decision is a win for America’s renewable fuel producers, farmers, and consumers seeking lower-cost, lower-carbon fuels,” said Geoff Cooper, president and CEO of the RFA. “The Court’s decision, which affirms EPA complied with the law and properly exercised its authority in setting these standards, will help set the tone for future RFS rulemakings and the long-term administration of the program. Specifically, we are pleased that the Court confirmed EPA’s approach to assessing certain statutory factors and considering the benefits of renewable fuels. Further, we are strongly encouraged by the Court’s confirmation of EPA’s authority to account for potential small refinery exemptions on a prospective basis when setting standards. Finally, we are pleased with the Court’s decision to uphold EPA’s authority to impose a supplemental 250-million-gallon volume in 2022 to make up for the volume that EPA improperly waived in 2016. Taken together, today’s Court opinion sets some important precedents and puts the RFS on solid footing for the future.”
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Growth Energy is also applauding the court’s decision. “This ruling is a win for renewable fuel producers and consumers,” said Emily Skor, CEO of Growth Energy. “In addition to upholding blending obligations, it protects against SRE abuse by projecting future exemptions, properly allocating RIN obligations, and bringing certainty to the marketplace. Thanks to the D.C. Circuit opinion, EPA can ensure the integrity of its annual RVOs and address shifts in market conditions and how refiners meet their blending obligations. Put simply, this ruling will allow the RFS to operate the way Congress intended and give the nation's biofuel producers what they need to continue doing what they do best—lower emissions while saving consumers money. Looking ahead, RVOs should reflect the continued innovation and growth of the renewable fuels industry.”
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Representatives of the U.S. biofuels industry on April 10 submitted comments to the U.S. Department of Treasury and IRFS providing recommendations on how to best implement upcoming 45Z clean fuel production credit regulations.
Lawmakers in Wisconsin on April 3 announced their intent to introduce legislation that would create a $1.50 per gallon production tax credit for SAF. The bill is currently circulating for co-sponsorship support and will be formally introduced soon.
A group of 16 senators, led by Sens. Chuck Grassley, R-Iowa, and Amy Klobuchar, D-Minn., on April 8 sent a letter to U.S. EPA Administrator Lee Zeldin urging the agency to increase RVO and account for SREs in the agency’s upcoming RFS rulemaking.
A group of small refineries on April 4 sent a letter to President Donald Trump urging him “to sent the multi-national oil and biofuels companies back to the drawing board to come up with a biofuels policy that does no harm.”
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