US court rejects EPA’s decision to withhold small refinery biofuel waivers

WASHINGTON (Reuters) – A U.S. appeals court on Wednesday said it struck down the Biden administration’s decision to deny small refiners “hardship waivers” that exempt them from nation’s biofuel mandates, in a win for the refining industry.

In July, the Environmental Protection Agency (EPA) denied almost all outstanding petitions from oil refiners that argued the federal requirement that they blend ethanol and other biofuels into their fuel would cause them financial hardship.

The U.S. Court of Appeals for the Fifth Circuit found in favor of refineries that challenged the EPA’s decision, including Ergon, Calumet Shreveport and Placid.

The court said in its 38-page decision that the EPA’s rejection of the waiver requests was “impermissibly retroactive; contrary to law; and counter to the record evidence”.

Under the Renewable Fuel Standard (RFS), oil refiners must blend billions of gallons of biofuels into the nation’s fuel mix, or buy tradable credits from those that do.

The EPA can, however, award exemptions to some small refiners if they prove that the obligations cause them undue harm.

The biofuel industry, including producers of corn-based ethanol, have fought the small refinery waiver program for years, arguing that it has been overused in a way that helps the oil industry but hurts American farmers.

Refiners, meanwhile, have long argued that the nation’s ethanol mandates impose unfair costs on fuel producers, and can threaten the viability of small plants.

(Reporting by Heather Timmons; Editing by Mrigank Dhaniwala)