Appeals Court Revives Refineries’ Hope of Securing Fuel Mandate Exemptions
NEW ORLEANS — A divided U.S. appeals court on Wednesday struck down the Biden administration’s decision to deny small Gulf Coast refineries with “hardship” waivers that would exempt them from the nation’s biofuel mandates.
The underlying case revolves around the Clean Air Act and how the Environmental Protection Agency enforces the renewable fuel standard.
The standard is a mandate intended to reduce harmful emissions by requiring refiners to blend billions of gallons of biofuels into the nation’s fuel mix, or, as an alternative, to buy tradable credits from other refiners that already meet the requirements.
While the renewable fuel standard comports with current U.S. policy regarding climate change, the EPA can, in some cases, award exemptions to small refiners who prove that compliance with the rule would cause them undo financial harm.
In this case, six small refineries sought exemptions, only to see the EPA deny their requests.
In each of their individual lawsuits, which were later consolidated before the 5th U.S. Circuit Court of Appeals, the refineries challenged the rejection of their requests, maintaining that the agency abruptly changed the way it considered exemption requests.
After listening to the refineries’ arguments, a majority on the 5th Circuit panel hearing the consolidated cases concluded the EPA’s denial was “impermissibly retroactive,” “contrary to law” — namely the Administrative Procedure Act — and “counter to the record evidence.”
The biofuel industry has long fought for the end of the small refinery waiver program, arguing that it has been overused and helps the oil industry, while stymying the growth of the clean energy sector.
Refiners, on the other hand, contend the ethanol mandates impose unfair costs on them and their customers, and threaten the commercial viability of their facilities.
In dissent, U.S. Circuit Judge Patrick Higginbotham said he believes that the majority on the panel got the decision wrong.
“Today we impermissibly interfere with these congressional mandates by finding that [the] venue is proper in this circuit, contrary to the text, structure and purpose of” the law.
“I would find that the only proper venue [for these challenges is the D.C. Circuit, consistent with the actions of the four other circuit courts that have addressed this very case, and dissent,” he wrote.
Dan can be reached at [email protected] and @DanMcCue
