A federal appeals court has upheld EPA regulations covering biogas producers who want to participate in the Renewable Fuel Standard, saying that under the law, the agency “must be able to verify that the biogas-derived fuel it is being asked to count as renewable was made with the correct biogas.”
A three-judge panel of the D.C. Circuit Court of Appeals denied a petition from the Coalition for Renewable Natural Gas, turning back seven of the group’s nine “substantive or procedural attacks” on EPA’s July 2023 rule and rejecting the other two because they were not “properly before [the court].”
The court said that simply because the Clean Air Act’s list of the entities EPA “shall” regulate under the program does not include biogas is not a reason to ignore it.
“By its plain text, that provision requires only that EPA regulations include rules governing those specified parties” — refineries, blenders, distributors, and importers — the court said. “It is a regulatory floor, not a cap.”
The “major questions doctrine,” used by the Supreme Court in 2022 to reject EPA’s power plant rule, does not apply, the court said, because Congress clearly authorized EPA’s regulation of producers.
In addition, the regulations are not “compliance obligations” but “voluntary protocols,” the court said.
“Under the updated regulations, biogas producers may elect to follow those rules if they wish to participate in the transportation-fuel economy and the RIN program,” the court said, referring to the Renewable Identification Numbers generated by renewable fuel producers, including makers of natural gas. “EPA is not forcing them to comply with anything.”
“All the regulations provide is that, if and when biogas producers independently decide that they want to enjoy the financial benefits of the RIN program, they must follow the anti-fraud, anti-error compliance measures that are part and parcel of the program,” the court said, calling its decision “narrow.”
EPA imposed registration and recordkeeping requirements on biogas producers to deter double-counting and fraud in the RIN program. Said the court: “Administering the RIN process for biogas-derived renewable fuel has proven difficult. That is because the end-product fuel counts as renewable only if it is used for transportation fuel and the gas that produced it comes from the right source. Yet it is hard to tell at the start of the chain where the biogas will end up, and it is just as hard to tell at the chain’s end where the biogas began.”
Among the requirements, the court noted: “Renewable natural-gas producers seeking to generate RINs for biogas-derived natural gas … have to obtain their biogas from biogas producers that have registered with EPA.”
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“The coalition argues that placing those registration, reporting, recordkeeping, and single-use requirements on participating biogas producers is arbitrary and capricious.” However, “To pass muster, regulations need not be necessary. They need only be ‘reasonable and reasonably explained,’ ” the court said, citing a 2009 D.C. Circuit decision.
Attorneys for the coalition and EPA argued before the court in April.
In a statement, Geoff Dietz, RNG Coalition Director of Federal Government Affairs, said, "RNG Coalition is disappointed in the court's decision, and we continue to review it to determine any potential next steps. We continue to work closely with EPA on ensuring the reforms are enacted in the most sensible and efficient way possible.”
In another case involving EPA, the D.C Circuit denied a request for a stay of EPA's latest attempt at limiting greenhouse gas emissions from power plants, which relies heavily on the use of carbon capture technologies that the National Rural Electric Cooperative Association, 27 states and numerous industry groups argued are unachievable.
"But petitioners have not shown they are likely to succeed on those claims given the record in this case," the court said in a brief order. As with its biogas decision (ruled on by a different panel, which shared one judge in common), the court also said the case does not "implicate a major question under West Virginia v. EPA," issued in 2022, in this case because EPA has claimed only the power to “set emissions limits under Section 111 based on the application of measures that would reduce pollution by causing the regulated source to operate more cleanly[,]” a type of conduct that falls well within EPA’s bailiwick."
The court also said the petitioners had not demonstrated "irreparable harm" because the deadlines are years away. "[A]ctual compliance deadlines do not commence until 2030 or 2032—years after this case will be resolved," the court said.
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