In Last-Minute Move, Trump Administration Grants Three Refinery RFS Exemptions, But Court Stays EPA Action

Bloomberg writers Kim Chipman and Jennifer A Dlouhy reported on Tuesday that, “The Trump administration granted three oil refineries exemptions from biofuel-blending requirements in a last-minute move, prompting quick rebuke from ethanol and biodiesel producers.

“Two of the Environmental Protection Agency waivers apply to the 2019 mandate under the Renewable Fuel Standard, according data posted online. The agency also approved a previously denied 2018 exemption. Another 65 requests are pending, including 15 for 2020. The names of the refineries weren’t disclosed.

“Biofuel advocates, including lawmakers, had pushed the Trump administration to hold off on approvals, with the U.S. Supreme Court set to hear arguments in a case testing EPA’s ability to grant them. The latest action puts added pressure on the incoming Biden White House to signal how it will proceed in the fight for share of U.S. gasoline tanks.”

Also this week, Reuters writer Stephanie Kelly reported that, “The U.S. Environmental Protection Agency (EPA) on Tuesday granted three waivers to oil refiners that exempt them from U.S. biofuel blending obligations, a last-minute move before President Donald Trump leaves office on Wednesday.”

The Reuters article reminded readers that, “Under the U.S. Renewable Fuel Standard, refiners are required to blend billions of gallons of biofuels into their fuel mix, or buy credits from those that do. Refiners can apply for an exemption if they can prove the requirements would do them financial harm.”

Ms. Kelly noted that, “The administration recently announced a series of moves regarding U.S. biofuel blending laws. The agency this month said it was requesting comment on a potential general waiver for refiners for the 2019 and 2020 compliance years and also was proposing a new rule that would remove or alter the labeling for retail gasoline that contains higher ethanol blends.

“The agency also said it was proposing to further extend the deadlines for oil refiners to prove compliance with blending requirements for both the 2019 and 2020 years.”

And DTN writer Todd Neeley reported on Tuesday that, “A federal appeals court ruled last year that the agency has illegally granted exemptions to three refiners in 2016. An appeal by refiners in that case will be heard by the Supreme Court.

“The latest action ends what has been a tumultuous relationship between Trump and the ethanol industry. In total, the Trump EPA granted 88 exemptions since 2016. The EPA still has 65 pending requests across multiple years.”

In further developments on this issue, a news release on Thursday from the Renewable Fuels Association stated that,

In response to an emergency motion filed Tuesday evening by the Renewable Fuels Association, the U.S. Court of Appeals for the D.C. Circuit today ordered that EPA’s action on Tuesday to grant three small refinery petitions must be ‘administratively stayed pending further order of the court.’

“The order prevents EPA from further processing the small refinery exemptions, at least until the court has had ‘sufficient opportunity to consider the emergency motion for stay.’ EPA has until February 3 to respond to the motion, and any replies are due to the court by February 10.

“The stay comes roughly 36 hours after EPA approved two 2019 waiver petitions and one 2018 petition, which—if allowed to stand—would erase another 260 million gallons of Renewable Fuel Standard blending requirements.”