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Biodiesel Challenges Waivers in Court


Biofuel, petroleum and environmental interests have filed legal briefs in a broader lawsuit challenging the EPA on its implementation of the 2018 Renewable Fuel Standard volumes, according to documents filed with the U.S. Court of Appeals for the District of Columbia Circuit in Washington.

Petroleum, biodiesel and environmental interest groups are attacking the 2018 volumes rule on a number of fronts.

Those include a challenge to EPA’s granting of small-refinery waivers; an agency decision not to consider a petition to change the RFS point of obligation from refiners and importers of gasoline and diesel to ethanol blenders; the process used to set volumes for advanced biofuels, including biodiesel; and the agency’s alleged lack of consideration for how the volumes could affect endangered species.

EPA also faces separate lawsuits by biofuel and agriculture interest groups on the agency’s granting of small-refinery waivers. The lawsuits were filed in the DC Circuit as well as the U.S. Court of Appeals for the 10th Circuit in Denver.

In a legal brief filed last week, the National Biodiesel Board said EPA waivers in 2016 and 2017 led to the loss of 300 million gallons of biodiesel blended.

The EPA granted a total of 49 such waivers for 2016 and 2017 renewable volume obligations. The EPA said in its latest RFS volumes proposal that it waived a total of 2.25 billion biofuel gallons those years. New EPA Acting Administrator Andrew Wheeler has indicated the agency will continue to consider future waiver requests in the same manner.

“EPA must account for and eliminate the shortfalls when next promulgating standards,” NBB argues. “And if information reasonably suggests that the next year’s aggregate volumes will fall short, EPA must account for the risk when promulgating standards.”

The NBB also challenges EPA on the method used to set the advanced biofuel volumes for 2018, set at 4.29 billion gallons. The group argues the agency cannot set the volumes based only on costs.

“The first time EPA exercised its cellulosic waiver authority to reduce the advanced-biofuel aggregate volume was in the 2014-2016 rule,” NBB said.

“For those years, EPA reduced the volume to what EPA called the ‘reasonably attainable.’ In the 2017 Rule, EPA did something different. After determining the reasonably attainable level, EPA went even lower — and, in fact, maxed out the agency’s cellulosic waiver authority. EPA’s only stated reason was ‘cost considerations.'”

The American Fuel and Petrochemical Manufacturers and the Small Retailers Coalition make a number of arguments in their legal brief filed last week. The groups said EPA “unreasonably interpreted” RFS waiver provisions for both “severe economic harm” and inadequate domestic supply of biofuels volumes.

In determining the 2018 volumes for advanced biofuels and total renewable fuels, the groups said, EPA did not estimate the “reasonably attainable” supply of ethanol. “EPA admitted chronic past overestimation, but failed to sufficiently correct its methodology,” the brief said.

The groups also make the case EPA should have considered attaching renewable identification numbers, or RINs, to exported biofuels gallons, as well as a petition to change the point of obligation in the RFS.

In another legal brief filed last week in the same case, the Sierra Club and Gulf Restoration Network argue the EPA did not conduct the proper Endangered Species Act review in setting the 2018 volumes. They asked the court to order EPA to throw out the 2018 volumes and to conduct an ESA review.

“Petitioners request the court issue an order declaring that EPA violated the ESA for its failures to determine the effects of its action on endangered species and critical habitat and consult with the services in promulgating the 2018 standard,” the brief said, “determining not to exercise its general waiver authority on the basis of severe environmental harm and on the RFS program.”

Source: Todd Neeley, DTN

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