May 19, 2021
The U.S. Court of Appeals for the Tenth Circuit on May 19 issued an order vacating three small refinery exemptions (SREs) approved by the Trump administration on Jan. 19, less than 24 hours before President Biden’s inauguration.
The Renewable Fuels Association on Jan. 20 filed a petition for review and an emergency motion to stay the effectiveness of the three SREs with the Court of Appeals for the D.C. Circuit. The court on Jan. 21 granted the administrative say requested by RFA. Sinclair later confirmed that its Wyoming refineries were the recipients of the three SREs, and the proceedings were moved to the Tenth Circuit Court of Appeals, according to RFA. Sinclair filed a new petition for review on March 15.
The U.S. EPA filed a motion on April 30 asking the court to vacate the SREs. In the motion, the EPA said the agency “did not analyze determinative legal questions regarding whether Sinclair’s refineries qualified to receive extensions of the small refinery exemption under controlling case law established by” the Tenth Circuit Court of Appeals in its January 2020 ruling on SREs, “and there is substantial uncertainty whether, if EPA performed such an analysis, it could grant the petitions submitted by Sinclair.”
The EPA also said in its motion that Sinclair has already retired the renewable identification numbers (RINs) necessary to demonstrate compliance with its 2018 and 2019 Renewable Fuel Standard obligations. The EPA said that remanding its decision with vacatur “would preserve the status quo ante by ensuring that the RINs that Sinclair already retired to demonstrate its small refineries’ compliance with their 2018 and 2019 compliance obligations remain retired while EPA reconsiders Sinclair’s exemption petitions.”
Sinclair on May 18 filed a response with the court stating that the company does not oppose the EPA’s April 30 request for vacatur and remand. The court on May 19 granted the unopposed motion for vacatur and voluntary remand. “We vacate the agency’s decision and remand for further administrative proceedings consistent with this court’s decision in [Renewable Fuels Association v. EPA].” That decision, handed down in January 2020, determined that the EPA cannot “extend” exemptions to any small refineries whose earlier, temporary exemptions had lapsed.
The RFA applauded the court’s decision. “We’re pleased that the court has vacated these improperly granted waivers and is sending them back to EPA for reconsideration,” said Geoff Cooper, president and CEO of the RFA. “If these exemptions had been allowed to stand, they would have erased RFS blending requirements for 260 million gallons of low-carbon renewable fuels, destabilizing rural communities and taking a step backward in the fight against climate change. EPA did the right thing in April by requesting that these spurious exemptions be vacated, and we applaud the agency for honoring President Biden’s commitment to putting an end to the surge of illegitimate refinery waivers.”
Growth Energy also welcomed news of the court’s ruling. “We are glad to see the court move swiftly and agree with EPA's motion to vacate and remand Sinclair's improperly granted SREs,” said Emily Skor, CEO of Growth Energy. "Going forward, SCOTUS 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.”
The American Coalition for Ethanol called the court’s action encouraging. “In anticipation that the prior administration would hastily grant these three SRE requests, ACE sought assurance from the EPA Inspector General that any last-minute SREs complied with federal law,” said Brian Jennings, CEO of ACE. “We're encouraged the court has vacated these wrongfully granted waivers and is sending them back to EPA for further review. Given that the Biden EPA appears to be focused on getting the RFS back on track, we expect these last-minute waivers to ultimately be denied.”
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