The U.S. Court of Appeals for the Tenth Circuit struck down three small refinery exemptions under the Renewable Fuel Standard (RFS). The Jan. 24 court ruling follows a challenge brought against the Environmental Protection Agency (EPA) in May 2018 by the Renewable Fuels Association (RFA), the National Corn Growers Association, the American Coalition for Ethanol (ACE) and National Farmers Union.
In a joint press release issued on Jan. 27, the groups said the decision is expected to broadly affect EPA’s approach to granting small refinery exemptions.
“We are extremely pleased with the Tenth Circuit’s decision to vacate the waivers granted by EPA to three refineries owned by CVR Energy and HollyFrontier,” said RFA president and CEO Geoff Cooper. “The court has affirmed our long-held position that EPA’s recent practices and policies regarding small refinery exemption extensions were completely unlawful. And while the decision addresses three specific exemptions, the statutory interpretation issues resolved by the court apply much more broadly.”
Among other findings, the court held that EPA cannot “extend” exemptions to any small refineries whose earlier, temporary exemptions had lapsed. None of the three small refineries in question in the court case consistently received an exemption in the years preceding its petition. The EPA exceeded its statutory authority in granting those petitions because there was nothing for the agency to “extend,” the court ruled.
The court also found that EPA abused its discretion in failing to explain how a small refinery might suffer a disproportionate economic hardship.