EPA proposes binding June 3 deadline to finalize new biofuel blending mandates

The US Environmental Protection Agency has proposed to commit to a June 3 deadline for finalizing biofuel blending requirements for 2021 and 2022 to settle litigation over its delay in setting annual mandates for the Renewable Fuel Standard program.

The agency posted the proposed consent decree in the Federal Register Feb. 23, and will take comments on its plan for settling the Clean Air Act citizen suit through March 25.

At issue is the EPA's obligation under the CAA to annually review biofuel blending targets set by Congress in 2005 and 2007 and issue a rule setting the amount of renewable fuel that must be mixed with gasoline and diesel, in line with market conditions, no later than Nov. 30 of the preceding compliance year.

New renewable fuel volume obligations for 2020, 2021, and 2022 were pitched by the agency in December after much delay precipitated by the Trump administration leaving office without proposing an RVO for 2021. Those have yet to be finalized.

Economic injury

Ethanol group Growth Energy filed a complaint Feb. 8 with the US District Court for the District of Columbia alleging that the EPA failed to perform its duties tied to the RFS program (Growth Energy v. Regan, et al, 1:22–cv–00347).

The group pointed to a "multi-year trend of [the EPA] disregarding statutory deadlines," noting delays in promulgating the 2010, 2012, 2013, 2014, and 2015 RVOs that spanned from as little as three weeks to as much as two years beyond the Nov. 30 deadline.

Because the RVOs set by the EPA "directly dictate the level of national demand for renewable fuels," biofuel producers have and continue to suffer economic injury from EPA's delays, Growth Energy said in its filing to the court.

Specifically, the EPA's inaction strips biofuel producers of the ability to plan and adjust their operations to assure output meets RFS compliance requirements, the group asserted. "This uncertainty and inability to plan future production directly affects plaintiff's members' bottom lines."

And the EPA's practice of retroactively setting RVOs to match actual renewable fuel consumption for the year causes further monetary harm as it lowers biofuel demand "in comparison to what would have been demanded" through timely RFS standards intended to spur growth in renewable fuel use, the group said.

The EPA, in the proposed consent decree, does not admit to any undecided issues of fact or law, but agrees to sign a final rule determining the RVOs for 2021 and 2022 by June 3.

In return, Growth Energy would agree that all claims in its complaint have been settled and would withdraw a motion seeking a deadline for action on proposed revisions to the 2020 RVO that the group filed in a separate legal matter.

The latter concession by Growth Energy is tied to the "EPA's intention to complete its reconsideration of the 2020 [RVO] concurrently with its establishment of the 2021 and 2022 [RVOs] through the single pending rulemaking," according to the draft consent decree.

'Significant milestone'

Growth Energy CEO Emily Skor called the agreement "a significant milestone for the biofuels industry."

"We are hopeful that EPA's agreement to submit to judicial oversight of a binding RVO deadline gives credence to the agency's commitment to get the RFS back on track and provide regulated parties and the biofuels industry with timely guideposts to enhance market certainty and incentivize innovation for the future of biofuels," Skor said in a statement.

However, the consent decree is subject to public comment. EPA Administrator Michael Regan or US Attorney General Merrick Garland, after reviewing those comments, could decide to withdraw the decree or withhold their consent. If neither occurs, the EPA will file a motion asking the court to enter the consent decree.

In a separate legal matter initiated in 2020 challenging the 2020 RVO set in a 2019 final rule, the EPA has asked the US Court of Appeals for the District of Columbia Circuit to continue to hold those consolidated cases in abeyance (RFS Power Coalition v. EPA, 20–1046).

The agency said its reconsideration of the 2020 RVO is "highly intertwined" with the 2021 and 2022 RVOs, as all were part of the single rulemaking proposed in December.

"Even if the proposed consent decree is not entered, EPA intends to continue advancing the reconsideration rulemaking process over the coming months," the agency said in a court filing. "EPA thus requests that the court continue to hold this case in abeyance until June 3, plus an additional three weeks for parties to confer on the next steps for this litigation before motions to govern further proceedings are due."

Growth Energy and a number of other parties to that litigation did not oppose that request.