US Supreme Court urged to resolve split over RFS

  • Market: Biofuels, Oil products
  • 20/05/24

Biofuel groups are asking the US Supreme Court to wade into a high-stakes legal fight that could decide whether some small refineries are eligible for federal exemptions from the Renewable Fuel Standard (RFS).

Growth Energy and the Renewable Fuels Association, in a legal appeal filed today, argue that a wave of lawsuits that refiners have filed against the US Environmental Protection Agency (EPA) over a 2022 policy that denied all pending small refinery exemptions should be consolidated before a single federal court, rather than heard in multiple courts that could reach "inconsistent" rulings. The biofuels groups argue that because the policy was nationally applicable, the Clean Air Act requires all of the refinery industry's lawsuits to be heard before the US Court of Appeals for the DC Circuit.

The US Court of Appeals for the 5th Circuit, in a ruling six months ago, reached the opposite conclusion in a case filed by six small refineries in Louisiana, Mississippi, Texas, West Virginia and Oklahoma. The 5th Circuit said because the "legal effect" of the refinery exemption denials were in the states where the refineries are located, the consolidation requirements do not apply. The court then proceeded to throw out EPA's denial of exemptions for the six refineries.

The biofuels groups say the Supreme Court should intervene in the case to reverse the 5th Circuit, which would consolidate all of the refinery litigation over the 2022 policy in the DC Circuit. Doing so would avoid "duplicative litigation" under which multiple federal courts would rule on the validity of the exact same EPA action, potentially meaning different refineries would be subject to different rules "depending solely on their location." Biofuel groups say small refinery exemptions are "inherently national" because if one is granted, it affects renewable fuel blending across the US.

The 5th Circuit is the only court that has agreed to hear the small refinery exemption lawsuits. Four other federal appeals courts have already concluded the cases should be heard by the DC Circuit, which last month held arguments in consolidated litigation over EPA's blanket denial of 105 pending requests for small refinery "hardship" exemptions from the RFS.

The biofuels groups say their appeal has ramifications beyond the RFS. The appeal is an "ideal vehicle" for the Supreme Court to resolve where lawsuits involving the Clean Air Act should be heard, an issue that is also present in litigation over EPA's "good neighbor" air emission regulations that are currently being heard by the Supreme Court.


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