Supreme Court to Take Up Biofuel-Blending Waivers

Bloomberg writer Jennifer A Dlouhy reported on Friday that, “The Supreme Court will review the ability of oil refineries to win exemptions from federal biofuel-blending quotas, a blow to producers of ethanol and biodiesel that had challenged the waivers.

The justices, without comment, agreed to hear an appeal by units of HollyFrontier Corp. and Wynnewood Refining Co., which said a 10th U.S. Circuit Court of Appeals ruling wrongly deprived small refineries of economic relief specifically authorized by Congress.

Ms. Dlouhy explained that, “Under the January 2020 ruling that the Supreme Court will now review, the EPA was found to have wrongly waived three refineries from the renewable fuel requirements. A three-judge panel of the 10th Circuit also said that refineries are only eligible for relief if they have received uninterrupted, continuous extensions of the exemptions — an exclusion that means only a handful nationwide will qualify.

“HollyFrontier and Wynnewood Refining argued that puts small refineries at risk of closing and pointed out that some facilities have already ceased petroleum refining operations.

“The Trump administration had discouraged the Supreme Court from taking up the appeal, which now could be heard as soon as April.”

A Reuters News article from Friday reminded readers that, “Under the Renewable Fuel Standard, refiners must blend billions of gallons of corn-based ethanol and other biofuels into their fuel or buy credits from those that do – a law meant to help farmers and reduce dependence on foreign oil.

“But small facilities under financial stress can also seek waivers from the obligation, and the Trump administration has dramatically ramped up the number of such exemptions granted to the industry – angering biofuel producers that claim the waivers undercut demand for their products.”

And DTN writer Todd Neeley reported on Friday that, “The Supreme Court will review a ruling from the U.S. Court of Appeals for the 10th Circuit in Denver that found EPA mishandled the small-refinery exemptions program in the Renewable Fuel Standard.

The 10th Circuit ruling in January 2020 led the EPA to reject more than 50 requests for retroactive exemptions in recent months. The court’s ruling was considered to be one of the biggest court victories by the biofuels and agriculture industries as it pertains to the RFS.

Mr. Neeley noted that, “HollyFrontier appealed to the high court in September after the 10th Circuit turned down a request for the whole 10th Circuit to rehear a case involving small-refinery exemptions. In that case, the appeals court originally ruled the EPA mishandled the small-refinery exemptions program in the Renewable Fuel Standard and granted exemptions to three refiners who did not qualify.

“In its petition to the Supreme Court, HollyFrontier asked the court to consider whether the RFS exemption program has been implemented correctly by the EPA.

“At issue is whether the agency can require small refiners to have received exemptions uninterrupted in order to continue to qualify.”