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Court: EPA Must Consider Environmental Impact When Setting Ethanol Mandate

The U.S. appeals court in Washington unanimously ordered the EPA to reconsider its Renewable Fuel Standard for 2018 because it failed to account for the potential impact of full-throttle corn production on endangered species and habitat. Even though the decision was directed at agency deliberations that took place in 2017, the Sierra Club, one of the plaintiffs in the case, said the EPA will have to take the ruling into account in writing the RFS for 2020.

“Today’s verdict shows that the EPA can’t just abandon its duties [under the Endangered Species Act] to wreak havoc on critical land and endangered species,” said Devorah Ancel, a Sierra Club attorney, following the court decision on Friday. “It’s unconscionable that the EPA continues to expand ethanol production when it’s destroying our land, water, and air.”

The 2018 RFS set a target of mixing 15 billion gallons of corn ethanol into gasoline for use in cars and light trucks. The 15-billion-gallon target was repeated for 2019 and is the EPA proposal for 2020. The agency is expected to finalize in November the RFS for the coming year.

With increasing rancor, ethanol makers and the petroleum industry are squabbling over biofuels rules because room is running out for both fuels as gasoline consumption stagnates. Farm groups and the ethanol industry say the EPA is undermining the RFS by exempting too many refineries from the RFS. If refineries don’t mix enough ethanol into gasoline, they are obliged to buy credits, known as RINs, to make up the difference. Refiners say RINs have been unduly expensive, and the fuel market is saturated with ethanol. The EPA has issued 85 “hardship” waivers to small refineries since President Trump took office in January 2017, compared to 23 during the final three years of the Obama administration.

Trump recently promised a “giant package,” not yet unveiled, to make up for the small refinery exemptions. Published reports say it would set the 2020 RFS at 21.04 billion gallons, 1 billion more than EPA proposed in July. The increase would be split evenly between conventional biofuels such as corn ethanol and cleaner burning “advanced” biofuels, such as cellulosic ethanol, made from grasses and woody plants, and biodiesel. However, farm and ethanol groups say when EPA exempts a refinery from RFS, it should require other refineries to make up the difference, which they estimate at 1.4 billon gallons.

Since early in his administration, Trump has refereed the tug-of-war between ethanol and petroleum. He campaigned as a champion of ethanol and also as a defender of the U.S. manufacturing sector and its blue-collar workers.

While ordering EPA to weigh the 2018 RFS for its environmental impacts, U.S. appellate judges Karen Henderson, David Tatel, and Thomas Griffith dismissed challenges filed by petroleum and biofuels groups.

“These consolidated cases concern various challenges to the 2018 rule. Several petitioners maintain it is too strict, others allege it is too lax and still others argue that the EPA failed to follow proper procedures in its promulation,” said the judges. “We conclude that all these challenges lack merit, except for one: That the EPA violated its obligations under the Endangered Species Act by failing to determine where the 2018 rule may affect endangered species or critical habitat.” The court remanded the rule to EPA for an environmental review.

Environmental groups say the RFS encouraged farmers to convert millions of acres of grassland to cropland, with the loss of wildlife habitat and increased use of pesticides, nutrient runoff and release of greenhouse gases. “This is an important victory for wildlife and a necessary first step in fixing U.S. biofuels policy,” said the National Wildlife Federation. “The court has rightfully told the agency to follow the law to ensure that biofuels policy does not harm endangered species. We urge the EPA to follow the law and take action.”

The trade group National Biodiesel Board said it was “frustrating” that the appeals court refused to act on the RFS waivers. “EPA’s flood of retroactive small refinery exemptions are causing severe economic harm to biodiesel and renewable diesel producers, forcing some to close their doors and lay off workers,” said NBB vice president Kurk Kovarik.

The appeals court decision is available here.

Produced with FERN, non-profit reporting on food, agriculture, and environmental health.
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