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Representatives of the U.S. biofuels industry are urging the U.S. EPA to deny several petitions that have been filed with the agency seeking waivers of 2019 and 2020 Renewable Fuel Standard blending obligations, calling them unnecessary, illegal and unjustified.
The EPA received four letters seeking RFS waivers in 2020. One was filed by a law firm March 30 on behalf of small refineries. A second was filed on April 7 by Louisiana Gov. John Edwards. A third letter was filed April 15 by Texas Gov. Greg Abbot, Utah Gov. Gary Herbert, Oklahoma Gov. Kevin Stitt, and Wyoming Gov. Mark Gordon. Pennsylvania Gov. Tom Wolf field a similar letter on May 11. The petitions argue that recent events warrant EPA exercising its general waiver authority on the basis of severe economic harm. The EPA also noted that it has received a letter from the National Wildlife Federation suggesting relief could be granted on the basis of severe economic harm.
The agency in mid-January opened a 30-day comment period on the waiver requests. The American Coalition for Ethanol, Renewable Fuels Association, Growth Energy and National Biodiesel Board all filed comments urging the agency to deny the requests.
In ACE’s comments, CEO Brian Jennings highlighted the lack of merit behind the petitions from refiners, oil-state governors, and the National Wildlife Federation to waive the RFS and detailed how these requests fail to satisfy the statutory evidentiary requirements and precedent from 2008 and 2012 which require EPA to determine that the RFS itself must be proven to be the cause of “severe economic harm” to justify a waiver, not outside factors such as the economic fallout from the COVID-19 pandemic, the primary argument made by the parties.
Jennings noted, “the pandemic-related shutdowns caused comparable economic harm to ethanol producers and virtually every other sector of the U.S. economy,” and further described the devastating impacts on the ethanol industry, mentioning ACE’s April 3 letter outlining three immediate steps EPA could have taken under the Trump administration to help curb the economic losses but ultimately did nothing.
The RFA called the waiver requests unjustified and illegal. “These waiver requests, which were rushed out the door by EPA one day before President Joe Biden was sworn in, never should have seen the light of day,” said Geoff Cooper, president and CEO of the RFA. “They do not satisfy any of the criteria established by the statute and they do not comply with past EPA guidance. Continuing this charade now shows a clear misunderstanding of the statutory waiver provisions and demonstrates a complete lack of knowledge regarding how the RFS actually works. The governors themselves acknowledge that the real source of economic harm experienced by refiners in 2020 was COVID-19, not the RFS. That admission alone should immediately disqualify these requests from any further consideration.”
Growth Energy noted that the petitioners claim that the alleged negative economic impacts caused by COVID-19, the Tenth Circuit’s small refinery exemption (SRE) decision last year, and, in their view, the high cost of RINs, entitle refiners to a waiver of their obligations because compliance with the RFS would cause “severe economic harm.”
As Growth Energy notes in its comment response, these refiners and oil states claims run counter to how the RFS is supposed to work and are far from meeting the narrow conditions under which such waivers have been and should be granted.
Emily Skor, CEO of Growth Energy, stated that “many industries, including the biofuels industry, are suffering from the drop in transportation fuel demand brought on by the pandemic. The petitioners’ misguided and misleading attempt to frame the severe economic harm waiver in terms that would selectively and unfairly benefit the oil industry at the expense of America’s biofuels and agriculture producers should be roundly and swiftly rejected by the EPA.”
The NBB called the waiver requests unnecessary and unjustified. Kurt Kovarik, NBB’s vice president of federal affairs, states, “It’s unclear why EPA – in the final days before the transition to a new administration – invited public comment on these meritless waiver requests. None of the petitions provides the required evidence that the RFS itself is causing economic or environmental harm. In fact, the requests point to the continuing coronavirus emergency as the cause of economic harm, rather than the RFS.
“The argument that the RFS general waiver provision should be twisted to allow specific fossil fuel interests to skirt the program requirements is particularly absurd. It is simply a ploy to continue destroying demand for advanced biofuels like biodiesel, similar to unwarranted small refinery exemptions.
“Biodiesel and renewable diesel production generates economic opportunity for communities across the country. Moreover, cleaner, better fuels provide carbon and criteria pollutant reductions that benefit everyone. The petitions discount the economic harm that small biodiesel producers experience when the RFS program is delayed and destabilized. EPA should reject the petitions.”