US court rejects EPA rule expanding E15 sales

An appeals court has thrown out a federal rule finalized in 2019 that authorized year-round sales of 15pc ethanol gasoline (E15) blends across the US, dealing a blow to biofuel producers who pushed for the change.

The US Court of Appeals for the DC Circuit, in a 3-0 opinion, said the US Environmental Protection Agency (EPA) exceeded its authority in that rule when it said E15 qualified for an emissions waiver for fuel blends "containing" 10pc ethanol. The court said that statuory language was clearly intended for 10pc ethanol gasoline (E10).

"By its plain terms, then, [the exemption] applies to E10, leaving no room for EPA to exempt E15," the court wrote.

Biofuel groups said they were disappointed with the ruling and would work to continue allowing E15 sales this summer and beyond. The ruling is unlikely to go into effect immediately because of a court practice to offer time for appeals. Biofuels groups argue the court's ruling would deprive consumers of a lower-carbon fuel option.

"We are pursuing all available options and will work with the administration and our congressional champions to ensure that we have a solution in place before the 2022 driving season," Growth Energy, the Renewable Fuels Association and the National Corn Growers Association said in a joint statement.

The decision represents a major victory to US refiners, which argued the E15 exemption was unlawful and could cut into their gasoline sales. If the ruling is sustained, it would undermine a long-term strategy from biofuel products to grow sales by expanding the availability of higher-ethanol fuel blends had been restricted in summer.

EPA said it was reviewing the court ruling.

At issue in the case are emission limits on fuel volatility that historically prevented E15 sales in parts of the US during the heat of the summer. EPA officials for years had said their hands were tied by existing law, but the agency changed course under orders from former president Donald Trump. EPA in the 2019 rule argued that because E15 by definition also contains 10pc ethanol, the higher-ethanol fuel should qualify for the long-time waiver.

But the court was unpersuaded by EPA's new interpretation of the statutory language, and said there was nothing in legislative history that suggested that Congress intended for the waiver to apply to E15. The court provided comparison to a bottle of wine to say the language was clearly meant for E10.

"Consider a label that a bottle of wine 'contains 10pc alcohol by volume.' No one would understand that number to be other than a literal statement of the actual amount of alcohol in a serving," the court wrote.

The ruling did not affect EPA's changes in the same 2019 rule affecting the administration of renewable identification numbers (RINs), which are compliance credits regulated parties use to prove they are attaining annual federal biofuel blending requirements.

By Chris Knight