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US biofuel makers sue EPA over small refinery waivers that shrank 2018 blending


DC Circuit lawsuit underscores ongoing fight over RFS

Ethanol RINs remain lower despite plan to boost blending

Washington —

A coalition of biofuel groups Wednesday sued the US Environmental Protection Agency challenging waivers that exempted small refineries from the 2018 biofuel blending mandate.

The waivers to 36 refineries reduced the biofuel mandate for that year by nearly 1.5 billion gallons.

The lawsuit underscores the biofuel industry's anger with the Trump administration over the Renewable Fuel Standard despite President Donald Trump saying this week that he had solved the fight between biofuel makers and oil refiners.

"The whole situation with ethanol that has been going on for so long, for so many years -- we have that now where it's finished, approved, done, and we're getting things ready to sign," Trump said, referencing EPA's supplemental proposal to increase the 2020 ethanol blending mandate.

EPA last week proposed increasing the 2020 mandate by 770 million Renewable Identification Numbers, well below the actual volumes waived on average over the past three years.

RINs are tradable credits EPA issues to track production and use of alternative transportation fuels. For corn-based ethanol, one gallon of ethanol yields one RIN.

"Under the RFS, refinery exemptions should decrease over time, not serve as a free pass for regulators to limit competition from homegrown fuels," biofuels trade group Growth Energy CEO Emily Skor said in a statement.

Biofuel groups have promised to keep pushing EPA to restore exempted volumes so that shuttered ethanol plants can reopen

"The EPA pulled a bait-and-switch with the plan President Trump promised on October 4th," said Daryl Haack, an Iowa corn farmer and treasurer of the Iowa Renewable Fuels Association. "We need those gallons restored - the actual gallons waived, not a bogus estimate. The demand destruction is real. The fix should be too."


Refiners maintain that the waivers have not hurt ethanol demand, production or exports.

"It will be interesting to see how Growth Energy will hold EPA accountable for damages to rural communities when every shred of data shows that small refinery hardship relief has had no impact on the ethanol blend rate," LeAnn Johnson Koch of the Small Refiners Coalition said in a statement.

The suit was filed in the US Court of Appeals for the District of Columbia Circuit by the Renewable Fuels Association, American Coalition for Ethanol, Growth Energy, National Biodiesel Board, National Corn Growers Association, and National Farmers Union.

S&P Global Platts Analytics estimates that reallocating 770 million RINs before the 2020 compliance year would prevent the loss of about 28,000 b/d of ethanol demand and 15,000 b/d of biomass-based diesel demand. US ethanol demand is now forecast at 942,000 b/d in 2020, up less than 1% from 936,000 b/d this year, with biomass-based diesel demand at 173,000 b/d in 2020, up 6% from 163,000 b/d this year, Platts Analytics said.

Platts assessed D6 ethanol RINs at 16 cents/RIN Tuesday, up 0.5 cents from Monday but down 8 cents since October 4, when the EPA announced the deal to boost biofuel blending.

EPA will hold a hearing on the proposal October 30, followed by 30 days of public comment. The time line makes it unlikely the agency will release the final 2020-21 biofuel blending volumes by Congress' November 30 deadline.

-- Meghan Gordon,

-- Edited by Derek Sands,