Coalition seeks court action forcing EPA to account for SREs

By Erin Voegele | July 31, 2019

An agriculture and biofuels coalition petitioned the U.S. Court of Appeals for the District of Columbia Circuit July 30 to lift a stay it placed on joint petition filed in 2018 asking the court to protect the renewable fuels industry from undue harmed caused by the U.S. EPA by requiring the agency to account for retroactive small refinery exemptions (SREs) in its annual Renewable Fuel Standard rulemakings.

The coalition, which consists of the Renewable Fuels Association, American Coalition for Ethanol, Biotechnology Innovation Organization, Growth Energy, National Biodiesel Board, National Corn Growers Association and National Farmers Union, first filed the lawsuit on June 4, 2018. The petition asks the EPA to revise its RFS regulations for setting annual percentage standards for renewable fuel to account for SREs the agency issues retroactively. Currently, EPA’s regulations only factor in SREs granted prior to the compliance year despite the fact that most SREs granted in recent years have been for compliance periods that had already ended.

On the same day the coalition petitioned the court, it also filed a motion to hold the case in abeyance pending further administrative proceedings. The coalition argued a judicial stay was “warranted to allow both the agency sufficient time to review the petition and to encourage discussions between the agency, industry stakeholders, and Congress toward a comprehensive administrative solution that would address several other unresolved renewable fuels issues in addition to retroactive small refinery exemptions...” This includes the court’s remand in Americans for Clean Energy, et al., v. EPA. “Petitioners would like to give a potential administrative resolution a good faith opportunity to succeed before pursuing their petition in this court.”

The court issued an order June 22, 2018, that the court would be held in abeyance pending further order from the court. The EPA was directed to file status reports with the court at 90-day intervals starting on Sept. 20, 2019.

Now, more than a year later, the coalition has petitioned the court to lift the stay it entered in June 2018. “Thirteen months have passed since the filing of the petition, without even a proposed substantive response from EPA,” the coalition wrote in its July 30 court filing. “Meanwhile, the agency has shown through various actions that it is not genuinely considering the coalition’s administrative petition and has in effect denied it. First, EPA has continued to grant retroactive [SREs]…Second, EPA has proposed and finalized annual RFS rules that fail to adjust annual standards for its retroactive exemption extensions and note therein that the agency would not change the annual standards equations. It did so despite the coalition’s administrative petition and the urging of the administration’s own Office of Management and Budget (OMB) to provide a mechanism to make up exempted volumes. And third, EPA has argued in various lawsuits that the statute does not allow it to adjust the percentage standards, including in ways he coalition argued for in its reconsideration petition.”

The coalition argues that EPA has constructively denied the coalitions petition, or alternatively, refused to convene a mandatory reconsideration proceeding. As a result, the coalition has asked the court to lift the stay and set a briefing schedule.

A statement released by the coalition said EPA’s failure to act on the petition hurts American agriculture and renewable fuel producers and pits the EPA’s support for refineries against another industry critical to rural America. “EPA’s actions are particularly inexcusable given the time-sensitive nature of the annual RVO and percentage standard setting process,” the coalition notes. “By failing to act on the Coalition’s request, EPA violated a statutory ‘right to timely decisionmaking’ implicit in the agency’s regulatory scheme that will result in the Coalition being ‘irreparably harmed through [the] delay.’”