January 9, 2024
BY Erin Krueger
The Renewable Fuels Association on Jan. 8 filed a petition with the Fifth Circuit Court of Appeals requesting a rehearing related to a November 2023 court decision on small refinery exemptions (SREs) filed under the Renewable Fuel Standard.
The EPA in December 2021 proposed to deny more than 60 SRE petitions filed by small refineries seeking exemptions from RFS blending requirements for one or more compliance years between 2016 and 2021. At that time, the EPA said its decision to deny those SREs was based on results from its review of the pending SRE petitions and supporting information, its legal, technical and policy analysis of the Clean Air Act provisions related to small refineries, and its application of the holding of the U.S. Court of Appeals for the Tenth Circuit in Renewable Fuels Association et al. v. EPA. The proposed denials were finalized in 2022. Shortly after the agency finalized those denials, six small refineries filed petitions with the court challenging the EPA’s denial of their SRE petitions.
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The court on Nov. 22 issued a 2-1 decision remanding to the U.S. EPA six SRE requests. In its ruling, the court said the petitioners’ SREs were denied by the EPA using a “novel CAA interpretation and economic theory that the agency published in December 2021.” The court concluded that the denials were “impermissibly retroactive,” “contrary to law,” and “counter to the record evidence.”
A coalition of ag and biofuels groups, including the RFA, Growth Energy, American Coalition for Ethanol, and National Farmers Union, issued a joint statement following the court’s Nov. 22 decision pledging to continue to vigilantly defend the RFS and fight against the illegal abuse of SREs.
The RFA on Jan. 8 filed a petition with the court asking for a rehearing. Within the petition, the RFA explains that the D.C. Circuit Court of Appeals is the only proper venue for hearing such challenges. The Clean Air Act specifies that the D.C. Circuit is the only appropriate court to hear challenges regarding EPA actions that are “nationally applicable” and considered by the agency to have nationwide scope or effect. According to RFA’s petition, “The D.C. Circuit has exclusive venue over challenges to EPA’s April and June 2022 decisions to deny small refinery petitions for exemptions from compliance with the RFS program. The panel erred in declining to transfer this case to that Court.”
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RFA’s petition points out that the Fifth Circuit’s decision to hear the refiners’ challenge departs from the court’s precedent and past practices. RFA also notes that four other Circuit Courts transferred similar cases to the D.C. Circuit—or dismissed them altogether. Further, the dissenting opinion in the Fifth Circuit’s November 2023 decision agreed that the proper venue for these challenges is the D.C. Circuit because the SRE denials “are inescapably nationally applicable.”
According to RFA, a rehearing is necessary to avoid important and substantial adverse consequences not only to the RFS program and biofuel producers, but also to established precedent on the Clean Air Act’s venue provisions.
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