Supreme Court to review Tenth Circuit Court ruling on SREs

By Erin Voegele | January 11, 2021

The U.S. Supreme Court announced on Jan. 8 it will review a Jan. 24, 2020 ruling by the Tenth Circuit Court of Appeals that, if implemented nationally, would reduce the number of obligated parties that are eligible to apply for small refinery exemptions (SREs) under the Renewable Fuel Standard.

The Tenth Circuit Court’s ruling stemmed from a May 2018 challenge brought against the U.S. EPA by the Renewable Fuels Association, the National Corn Growers Association, the American Coalition for Ethanol and the National Farmers Union.

In its January 2020 ruling, the Tenth Circuit Court of Appeals struck down three SREs that it said were improperly issued by the EPA and held that the agency cannot “extend” exemptions to any small refineries whose earlier, temporary exemptions had lapsed.

Affiliates of Wynnewood Refining and HollyFrontier filed petitions with the Tenth Circuit Court of Appeals in March 2020 requesting a rehearing en banc of the Jan. 24 ruling. Those petitions were rejected by the court in April 2020.

The two refining companies escalated their challenge over the court ruling in September 2020 when they filed a petition for a writ of certiorari with the Supreme Court. The U.S. Department of Justice filed documents with the court in December recommending against Supreme Court review of the Tenth Circuit Court’s ruling. Despite that recommendation, however, the Supreme Court on Jan. 8 granted the petition for review filed by Wynnewood and HollyFrontier.

The RFA, NCGA, ACE and NFU issued a statement on Jan. 11 stressing that they will continue to defend the Tenth Circuit Court’s Jan. 2020 ruling. “Our groups believe the Tenth Circuit got it right the first time, and we will continue to defend the court’s ruling and stand up for the renewable fuel producers and farmers who have been harmed by the granting of these waivers,” the groups said in a joint statement.
“We strongly believe the 10th Circuit Court’s ruling is consistent with the Clean Air Act and Congressional intent, and we are confident that the Supreme Court will ultimately affirm the Tenth Circuit’s decision.”

The National Biodiesel Board has also spoken out to express disappointment in the Supreme Court’s decision. "We are disappointed in the Supreme Court's decision to review the case but will continue to vigorously pursue a resolution to the damage that small refinery exemptions do to the biodiesel industry,” said Kurt Kovarik, vice president of federal affairs for the NBB. “Refiners are challenging the 10th Circuit's findings on a single issue. EPA must still explain how the RFS itself is a hardship to refiners and why it arbitrarily failed to consider its own evidence that refineries recoup the costs of RINs."