The U.S. Environmental Protection Agency (EPA) Monday announced its support of the Tenth Circuit Court’s January 2020 interpretation and decision regarding Small Refinery Exemptions (SRE).

Following the change in federal administrations, EPA’s new leadership reevaluated the statutory text and now agrees with both the Tenth Circuit and biofuel litigants in the case.

Illinois Farm Bureau's Richard Guebert Jr. applauded the news.

“Illinois Farm Bureau members across the state appreciate EPA’s decision upholding the Tenth Circuit Court ruling which greatly limits number of small refinery exemptions," Guebert said. "This demonstrates the Biden Administration will work to preserve the integrity of the Renewable Fuel Standard and protect the future of clean, renewable fuel and its positive impact on our farmers."

In January 2020, the Tenth Circuit vacated and remanded three EPA decisions granting SRE petitions for the 2016 and 2017 RFS compliance years, which were issued in calendar years 2017 and 2018. The court held that a SRE can only be granted if the refinery demonstrates an existing exemption or demonstrates disproportionate economic hardship caused by RFS compliance.

EPA recently stated that it “agrees with the court that the exemption was intended to operate as a temporary measure and, consistent with that Congressional purpose, the plain meaning of the word ‘extension’ refers to continuing the status of an exemption that is already in existence.”

The four petitioners in the case — the Renewable Fuels Association, National Corn Growers Association, American Coalition for Ethanol and National Farmers Union, released the following statement in response to EPA’s announcement:

“Our nation’s biofuel producers and farmers appreciate EPA’s careful review of the Tenth Circuit Court’s decision, and we are pleased the agency’s new leadership is reversing the previous administration’s flawed position on small refinery exemptions. This announcement marks a major step forward by the Biden administration to restore the integrity of the RFS and honor the intent of Congress.”

But the legal battle may not be over quite yet.

In January 2021, the U.S. Supreme Court granted a request from two refiners to review the Tenth Circuit Court ruling. Arguments before the Supreme Court are expected this spring.

Several Illinois Farm Bureau members traveled to Michigan in October 2019 to testify in support of ethanol "and to minimize the proliferation of undue small refinery waivers. Yesterday’s decision is an affirmation to those members that their voices and others across the nation did not go unheard," Guebert said.

IFB members testify at EPA RFS hearing in Michigan