US appeals court rejects rehearing request on biofuels exemptions case

Houston — A federal appeals court late Tuesday rejected a request from four refineries to rehear a key case involving the US Environmental Protection Agency's small refinery exemption program.

The 10th District Court of Appeals denied a motion by Wynnewood Refining, HollyFrontier Cheyenne Refining, HollyFrontier Refining and Marketing and HollyFrontier Woods Crossing Refining seeking a hearing en banc on the case.

The refiners must now appeal to the US Supreme Court if they hope to overturn the appeals court's ruling. The EPA declined to appeal the appeals court's original ruling, letting the deadline lapse in March.

The refiners argued the court's ruling in January eviscerates the provision in the federal Renewable Fuel Standard that allows small refineries to be exempted from meeting biofuels blending mandates that cause economic hardship.

The court on January 24 vacated the SREs the EPA granted to the four refineries. In its ruling, the court said exemptions could only be granted to refineries who had been granted such exemptions in the previous year.

SREs have been a contentious issue between refiners and the US biofuels industry. Refiners have argued they are necessary to shield small producers from excessive renewable identification numbers (RIN) costs. Biofuels advocates, on the other hand, have argued they give the EPA a backdoor way to cut biofuels demand mandated by the RFS.

It is unclear how the EPA will handle the ruling in regards to previous exemptions. Shortly after the appeal deadline, the agency announced it would not revisit previous exemptions at this time, and extended the deadline for refineries to show compliance with federal biofuels blending requirements.