When the US Appeals Court for Washington, DC, struck down the US Environmental Protection Agency's use of waivers to help implement renewable fuel quotas on July 28, the opinion addressed several other questions that had been raised about the federal Renewable Fuel Standard.
Americans for Clean Energy (ACE), which successfully argued against EPA's renewable fuel waivers, also said that EPA should have been required to consider renewable fuel credits known as Research Identification Numbers that were carried over as a source of supply. EPA disagreed, and the court concurred.
"Without the flexibility and liquidity provided by carryover RINs, EPA reasoned that obligated parties facing unexpected shortfalls or increased demand for transportation fuel may be left with no way to comply with the statute," it wrote. "That situation, in turn, could 'lead to the need for a new waiver of the standards' and thereby undermine 'the market certainty so critical to the long-term success' of the Renewable Fuel Program."
Next, the court considered two challenges from opposite sides-the National Biodiesel Board (NBD) and ACE on one hand, and refiners, importers, and blenders that are obligated parties under the RFS on the other-arising from EPA's being late in issuing the final 2016 renewable fuel quotas.
NBD and ACE said that EPA improperly used actual volumes of renewable fuel that were produced during 2014 and 2015 when it belatedly issued the renewable fuel requirements for those years. "Although EPA determined that it was duty-bound to issue volume requirements and percentage standards for those years-even though they were late-EPA also recognized its duty to consider and mitigate any hardships caused to obligated parties" because it was late, the court wrote.
Adequate time provided
The Obligated Party Petitioners asked whether EPA permissibly issued biomass-based diesel volume requirements for 2014-17 that were delayed. The court responded that EPA did, since decisions in two earlier cases-National Petrochemical & Manufacturers Association vs. EPA, and Monroe Energy LLC vs. EPA-authorized EPA to issue the standards late if it considered, among other things, whether obligated parties had enough time and access to enough RINs to comply with the delayed requirement.
The court also rejected obligated parties' challenges of EPA's 2016 biofuel and biogas projections, saying that each was reasonable and adequately explained.
It also rejected NBD's challenge of EPA's using its cellulosic waiver authority when the agency considered demand-side constraints in the advanced biofuels market when deciding to make reductions under the cellulosic waiver provision. Finally, the court rejected a petition by some obligated parties to reconsider moving the renewable fuel obligation point downstream since it was covered in its inadequate domestic supply ruling.
