Growth Energy, the nation’s largest biofuels trade association, filed its opening brief today in its challenge to the U.S. EPA’s failure to enforce compliance under the Renewable Fuel Standard. In Growth Energy v. U.S. Environmental Protection Agency, Growth Energy argues against EPA’s decisions to allow refiners not to comply with their RFS obligations even though EPA previously denied their petitions to be exempt from them. If upheld, these decisions would reduce the amount of renewable fuel in the marketplace by about 1.63 billion gallons.

“Refiners have been trying to dodge compliance with the RFS since it was first enacted. Unfortunately, EPA’s ‘alternative compliance’ doublespeak facilitates refiners’ ability to shirk the responsibilities that EPA itself has explicitly concluded they have. As such, ‘alternative compliance’ is merely another term for unlawful ‘non-compliance,’” said Growth Energy CEO Emily Skor. “Growth Energy is pressing the court to undo EPA’s overreach to ensure that refiners meet their RFS obligations as Congress intended. The RFS remains America’s single most successful clean energy policy and Growth Energy will continue to use every tool at its disposal to hold EPA accountable, and to protect the RFS from those who seek to undermine its benefits.”

Read the full brief here.

 

Background

The RFS requires that refineries annually use at least the specified amount of renewable fuel in the transportation fuel they distribute. It also allows EPA to exempt individual refineries from their RFS obligations for a given year under limited circumstances. EPA initially granted thirty-one “small refineries” thirty-four exemptions from their 2016-2018 RFS obligations, but two lawsuits were promptly filed challenging the standard EPA applied in granting those exemptions. Eventually, after courts ruled against the exemptions, EPA complied and restored the refineries’ 2016-2018 RFS obligations.

However, EPA concurrently issued the “alternative compliance” actions at issue in this case. Despite their name, these actions do not facilitate the refineries’ compliance with their now-unmet 2016-2018 RFS obligations, but rather absolve them from those obligations. Thus, EPA’s “alternative compliance” actions reduced the net amount of renewable fuel that must be used by about 1.63 billion gallons.  Although 2016-2018 have passed, the refineries could still meet their unmet obligations by using extra renewable fuel (or buying credits from others that used extra renewable fuel) in the future. But EPA refused to require that, instead issuing the “alternative compliance” actions because of asserted concerns about imposing obligations “retroactively.” 

Growth Energy filed a suit against EPA and its “alternative compliance” actions in response, arguing that the actions are unlawful for multiple reasons. More broadly, the “alternative compliance” actions are just the latest in a troubling pattern of EPA delaying the imposition or restoration of RFS obligations and then invoking the specter of “retroactivity” to neuter those obligations anyway. Through “retroactivity,” EPA has given itself the power to negate the RFS program itself, in defiance of Congress’s express will.