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Appeals court vacates three last-minute RFS waivers

The federal appeals court that greatly restricted access to “hardship” exemptions from the U.S. ethanol mandate in 2020 granted an EPA request on Wednesday to cancel three exemptions issued on President Trump’s final day in office. After the Biden administration took office, the EPA said the waivers had been issued without analysis of whether they were appropriate.

“We vacate the agency’s decision and remand for further administrative proceedings consistent with this court’s decision in Renewable Fuels Association,” said a three-judge panel of the 10th Circuit U.S. Court of Appeals, based in Denver. In January 2020, the 10th Circuit ruled, in Renewable Fuels Association v. EPA, that small-volume refineries were eligible for waivers from complying with the Renewable Fuel Standard (RFS) only if they had received a waiver in the preceding year.

The Supreme Court heard arguments last month in an oil industry appeal of the 10th Circuit ruling. The RFS guarantees biofuels a share of the gasoline market. The EPA can issue waivers to small refineries that fail to blend enough ethanol into their gasoline if they show it would be unduly expensive to buy the credits, known as RINs, to comply with the mandate.

“We are glad to see the court move swiftly and agree with EPA’s motion to vacate and remand Sinclair’s improperly granted SREs [small refinery exemptions],” said Emily Skor, CEO of Growth Energy, a biofuel trade group. “Going forward, SCOTUS [the Supreme Court] should affirm the 10th Circuit’s opinion and affirm EPA’s authority to deny this and all other improper SREs outright, once and for all.”

Ethanol makers say the waivers have reduced biofuel demand by roughly 4 billion gallons over the past few years. The number of EPA waivers surged under the Trump administration.

The two-page appellate court order is available here.

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