Renewable fuels industry sues EPA over biofuel volume requirements

WASHINGTON, Jan. 13, 2016 - EPA’s volume requirements for renewable fuels are too low, biofuels industry groups said in announcing a lawsuit against the agency.

In justifying a waiver of levels called for in the Energy Independence and Security Act of 2007, the agency, in a final rule published last month, “erroneously concluded that there was an inadequate supply of renewable fuel,” the groups said in a joint statement. The suit was filed by Americans for Clean Energy, the American Coalition for Ethanol, the Biotechnology Innovation Organization, Growth Energy, National Corn Growers Association, National Sorghum Producers, and the Renewable Fuels Association.

EPA’s rule increased the final Renewable Volume Obligations, or RVOs, to 18.1 billion gallons for 2016, but that is well short of the 22.25 billion gallons called for in the law.

In the rule, EPA said that despite “significant increases” in renewable fuel use in the U.S., it was “impossible” to achieve the timeline laid out by Congress because of “real-world constraints, such as the slower than expected development of the cellulosic biofuel industry and constraints in the marketplace needed to supply certain biofuels to consumers.”

The biofuels groups disagreed. “By focusing on fuel distribution capacity and demand rather than supply, and by failing to consider surplus RINs from prior years, the agency erroneously concluded that there was an inadequate supply of renewable fuel to justify a waiver of the levels established by Congress,” they said in their statement.

RINs, or Renewable Identification Numbers, are used by refiners and blenders to demonstrate compliance with the RFS volume requirements. Producers and importers generate RINs based on the volume of renewable fuel they make available. RINs can then be traded, carried over to the following year, and used to show compliance with volume obligations.

The biofuels groups filed their petition with the D.C. Circuit Court of Appeals. The petition itself has no substantive details, but the groups said that “a preliminary, non-binding listing of issues to be raised in the court of appeals will be filed at a later date.”

The American Fuel & Petrochemical Manufacturers backed EPA in the dispute. “AFPM fully supports EPA’s decision to use its waiver authority to adjust the RFS volume mandates to reflect the E10 blend wall, vehicle and engine warranty restrictions, and overwhelming consumer rejection of higher-ethanol fuels,” AFPM President Chet Thompson said in a statement.

“We are confident that the D.C. Circuit will uphold EPA’s legal authority,” he continued. “It is long overdue for Congress to repeal this broken program and for the biofuels industry to stand or fall on its own, without government subsidies. But in the meantime, it is clear that EPA has the authority to adjust unrealistic mandates to account for market realities.”

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