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The Insider

The Biden EPA is facing pressure to enact policies that boost the use of biofuels, while the agency weighs whether to proceed with the Trump administration’s proposal to delay renewable fuel compliance deadlines and pending litigation could affect the agency’s biofuels authority.

Governors of states where ethanol production is a major part of the economy are outlining a number of policies they want President Joe Biden and his picks for EPA administrator and Agriculture Department secretary to support.

Governors’ Biofuels Coalition Urges Biden To Boost Ethanol, Support RFS
The Governors’ Biofuels Coalition of 22 states is urging President Joe Biden to pursue several policies that the group argues are essential for boosting the biofuels industry, including issuing overdue EPA renewable fuel standard (RFS) targets for 2021, denying refiners’ requests for RFS compliance waivers, and other measures.

A Feb. 10 letter from the coalition to Biden as well as EPA chief nominee Michael Regan and Tom Vilsack, nominee to lead the Agriculture Department, urges the new administration to make biofuels a key component of addressing transportation-sector greenhouse gas emissions, with the governors saying biofuels are especially important in the near-term.

The letter echoes arguments made recently by biofuels groups that biofuels offer the fastest route to near-term GHG reductions, by using existing liquid fueling infrastructure, as the sector considers how to respond to a commitment by the Biden team to massively expand use of electric vehicles that consume no biofuels.

Coalition Chairman and Minnesota Gov. Tim Walz (D) argues in the letter that the RFS program was “abused” under the Trump administration, including through a significant increase in the number of RFS compliance waivers that EPA granted to refiners claiming economic hardship.

EPA is still reviewing dozens of requests from refiners for small refinery exemptions (SREs), and is being sued over its decision in September to deny dozens of others that sought to circumvent a landmark January 2020 ruling by the U.S. Court of Appeals for the 10th Circuit. That ruling bars issuance of waivers to refineries that lacked them in prior years, at least in the 10th Circuit states of Oklahoma, Kansas, New Mexico, Colorado, Wyoming and Utah, biofuels advocates say.

The 10th Circuit ruling is now under review by the Supreme Court, and the eventual decision in that case, HollyFrontier Cheyenne Refining, LLC v. Renewable Fuels Association, will have far-reaching implications for EPA’s waiver policy.

EPA has cited the pending high court case in its push to halt litigation in the District of Columbia Circuit over the agency’s RFS targets for 2020.

EPA Asks D.C. Circuit To Halt 2020 RFS Suit Over Challengers’ Objections
EPA is asking a federal appeals court to halt litigation over its renewable fuel standard (RFS) biofuel blending targets for 2020 pending the resolution of a Supreme Court case over EPA’s policy on RFS compliance waivers for small refineries, but renewable fuels groups and refiners challenging the rule say they oppose delaying the suit.

EPA in its motion for abeyance filed with the D.C. Circuit notes the pending high court case and says, “The Petitioners’ briefs here raise arguments related to the issue before the Supreme Court in the HollyFrontier case, which is about the scope of EPA’s authority to grant exemptions to small refineries from the obligations of the Renewable Fuel Standard program. Therefore, EPA moves for an abeyance pending a decision in that case."

The Biden administration will also have to decide how to proceed with a Trump-era proposal to delay RFS compliance deadlines, with refiners and biofuels groups urging the agency to take opposing paths.

Refiners, Biofuels Groups Clash Over EPA Plan To Delay RFS Compliance
Refiners and biofuels groups are fighting over the Trump EPA’s proposal to delay renewable fuel standard (RFS) compliance deadlines, with refining groups backing the move and urging the Biden administration to finalize it but biofuels groups condemning it as an 11th-hour effort by the Trump administration to “undermine” the RFS.

The agency held a Feb. 9 virtual hearing to receive public input on its Jan. 15 proposal to push back compliance deadlines for small refiners for the 2019 RFS, and for all refiners for the 2020 RFS.

EPA has justified the delays based on market uncertainty caused by the Supreme Court’s ongoing review of the agency’s policy giving small refiners RFS compliance waivers due to economic hardship, and EPA’s failure to set biofuel blending targets under the program for 2021. The agency proposed a compliance deadline for small refineries for the 2019 RFS of Nov. 30, 2021, extended from the original deadline of March 31, 2020.

Biofuels producers may also face challenges from a December Toxic Substances Control Act compliance advisory that could make it harder to market novel renewable fuels.

Trump TSCA Advisory Might Impede Development Of Renewable Fuels
A Toxic Substances Control Act (TSCA) compliance advisory that the Trump EPA issued in December might impede the development and marketing of some renewable fuels and fuel additives if those fuels have not already been registered on the TSCA inventory of chemicals, according to lawyers tracking the issue.

Cynthia Stroman, a partner with King and Spalding LLP, told Inside EPA in a Feb. 8 interview that the Dec. 22 advisory issued by EPA may pose problems for biofuels producers. While ethanol is unlikely to be subject to the advisory, other, more novel fuels might be implicated, Stroman says, although “it is really hard to say whether a particular product would be affected."