ABFA asks Congress to halt RFS small refinery exemptions

By Erin Voegele | July 17, 2018

On July 17, Michael McAdams, president of the Advanced Biofuels Association, sent a letter to several congressional leaders regarding small refinery exemptions recently granted under the Renewable Fuel Standard.

Within the letter, McAdams notes that the EPA is scheduled to hold a hearing July 18 on its proposed rule to set 2019 renewable volume obligations (RVOs) under the RFS, along with the 2020 RVO for biomass-based diesel. “EPA has asked the public to refrain from commenting, however, on any issues concerning EPA’s issuance of small refinery waivers,” he wrote. “We write to urge you to ensure EPA begin implementing a more transparent, rules-based process for issuing these waivers. Until this new process commences, the agency should refrain from issuing any additional small refinery waivers.”

McAdams notes that under the previous EPA administrator, the waivers were issued in a manner that undermined Congress’s objectives when it crafted the RFS and undercut many businesses’ investment-backed expectations. “We are optimistic that under new leadership EPA will implement the RFS in a more equitable, transparent manner that better aligns with its statutory directive,” McAdams continued. “To do so effectively, however, it must be willing to hear and respond to the public’s comments on the small refinery waivers because these waivers have a significant impact on the reality of the standards EPA is proposing.”

The letter notes that the EPA has granted nearly 50 retroactive RFS waivers for 2016 and 2017. “These waivers lowered demand for renewable biofuels, thereby diminishing the value of investments that the advanced biofuels industry made in response to Congressional policy,” McAdams wrote. “The waivers undermine the integrity, stability, and fairness of the program by rewarding companies looking to dodge their obligations and punishing companies that have planned responsibility to comply with the law. Moreover, these exemptions discourage investments in this market and in new technology. Finally, these exemptions do not address the flaws in the RFS; only comprehensive legislative reform will address the challenges in the program.”

In the letter, McAdams indicates that the EPA has withheld information regarding the recipients of the waivers and its reasoning for granting the waivers. Due to the lack of transparency in the waiver process, the ABFA has filed a lawsuit against the EPA and a Freed of Information Act request. The letter notes that more than 10 FOIA requests have already been filed on the topic, but none have received any response. “At a minimum, information about EPA’s decision-making process for granting exemptions on the grounds of disproportionate economic hardship should be made public,” McAdams wrote.

McAdams asks Congress to direct the EPA not to grant any additional exemptions until the pending lawsuits filed by the ABFA and Renewable Fuels Association are decided. “Since the agency has failed to respond to Congressional inquiries on the matter, the federal court must be able to exercise oversight and render judgement on whether EPA’s process for determining disproportionate economic hardship is lawful,” McAdams said.

“We are optimistic that under new leadership, the agency will act more responsibly,” he continued. “Should EPA continue to grant these small refinery exemptions without any accountability to Congress or stakeholders, however, the comments collected on the proposed 2019 RVO are meaningless. Without knowing to what extent these exemptions are undercutting the annual mandate, impacted parties are left in limbo while renewable fuels markets plummet.”