The Advanced Biofuels Association (ABFA) has asked the US Court of Appeals in Washington DC to decide whether the Environmental Protection Agency (EPA) broke the law by granting Renewable Fuel Standard (RFS) waivers to an increasing number of small refineries.
The petition specifically called for a review of the EPA’s “decision to modify the criteria or lower the threshold by which the Agency determines whether to grant small refineries an exemption” from the RFS.
The waivers are meant to protect small refineries (facilities producing less than 75,000 barrels of oil per day) from ‘disproportionate economic hardship’. These refineries are often sometimes owned by large oil companies; waivers granted to refineries owned by the large oil companies Andeavor and CVR Energy have prompted the ethanol industry to censure the practice.
“We have seen reports that the number of small refinery exemptions recently granted for compliance years 2016 and 2017 have doubled compared to previous years,” said Michael McAdams, president of ABFA. “ABFA members are concerned that Administrator Pruitt is granting these exemptions in an arbitrary and capricious manner to undisclosed parties behind closed doors with no accountability for its decision-making process.”
“The news reports about these exemptions have had immediate and significant market impacts on the prices of Renewable Identification Numbers (RINs) for the biomass-based diesel (D4) and overall renewable fuel (D6) pools,” continued McAdams. “Dropping RIN prices disincentivise blending, causing economic harm to ABFA’s members and posing a threat to the integrity of the RFS program at large.”
On 12 April, thirteen Senators wrote to Pruitt asking him to cease issuing any refinery waivers and make public all refineries that have received a waiver in the last three years. It also requested that Pruitt report to Congress within two weeks of the letter to justify the waivers and confirm whether or not the blending volumes were redistributed to other refiners.
The industry and its representatives in Congress have been pushing for the year-round sale of E15 while attacking these waivers. The 15% blend of ethanol with gasoline is restricted in the US during summer months to reduce ozone emissions. The industry argues that the regulations are outdated and that their repeal would be a boon to agricultural communities and provide greater choice to consumers.