Ethanol and agriculture industry groups have petitioned the U.S. Circuit Court of Appeals for the D.C. Circuit to hear a challenge to the Renewable Fuel Standard (RFS) finalized by the Environmental Protection Agency in November 2015.
The groups, including the Americans for Clean Energy; American Coalition for Ethanol; Biotechnology Innovation Organization; Growth Energy, National Corn Growers Association; National Sorghum Producers; and the Renewable Fuels Association filed the petition, are challenging EPA’s authority to waive biofuel volume mandates set by the 2007 law. “The petitioners intend to demonstrate that EPA’s interpretation of its general waiver authority under the Renewable Fuel Standard statute was contrary to the statute,” according to a news release from Americans for Clean Energy.
“By focusing on fuel distribution capacity and demand rather than supply, and by failing to consider surplus renewable identification numbers (RINs) from prior years, the agency erroneously concluded that there was an inadequate supply of renewable fuel to justify a waiver of the levels established by Congress,” the release said.
EPA announced a three-year program for 2014, 2015, and 2016 that include biofuel volumes below those set in the original 2007 law. The overall RFS cuts were a result of an overall decreased demand for gasoline, reflected in about a 20-percent reduction in overall biofuels volumes in the RFS. EPA used a waiver rule to change the blend volumes required by petroleum marketers.
However, EPA in December announced the final RFS required volume obligations for 2014, 2015 and 2016 at higher levels than proposed by the agency in May 2015. Specifically, the EPA raised the implied corn mandate over the three years by more than 1.5 billion gallons and has set the 2016 ethanol mandate at a level beyond the 10-percent blendwall limits.
“By increasing the mandated volume of ethanol beyond the blendwall for next year, and retroactively increasing the mandates for 2014 and 2015, more corn from feed and food will be diverted into fuel production, resulting in increased costs for poultry and livestock producers, said NCC President Mike Brown at the time EPA announced the final RFS required volume obligations. “Since the RFS was enacted, chicken producers alone have incurred more than $50 billion in higher actual feed costs due to the ethanol mandates, and the tab keeps getting run up under this broken law,” Brown said.
Biofuel volumes are set in the final rule at 16.28 billion gallons for 2014; 16.93 billion gallons for 2015, and 18.11 billion gallons for 2016.
Meanwhile, the American Fuel and Petrochemical Manufacturers (AFPM) said the group stands behind EPA’s authority to alter RFS volumes in the way the agency did. “AFPM fully supports EPA’s decision to use its waiver authority to adjust the RFS volume mandates to reflect the E10 blend wall, vehicle and engine warranty restrictions, and overwhelming consumer rejection of higher ethanol fuels,” AFPM President Chet Thompson said in a statement.
“We are confident that the D.C. Circuit will uphold EPA’s legal authority to do so. It is long overdue for Congress to repeal this broken program and for the biofuels industry to stand or fall on its own without government subsidies,” Thompson said. “This lawsuit is yet another attempt by the ethanol industry to use government mandates to force higher percent ethanol blends upon consumers.”
