A United States Supreme Court is set to hear an environmental case involving small oil refineries seeking exemptions from the Renewable Fuel Standard (RFS) program, on March 2025.
Congress has amended the Clean Air Act to establish the Renewable Fuel Standard (RFS) program, which requires refiners and importers of transportation fuel to blend increasing amounts of renewable fuels into their products each year. To comply, these companies must either blend renewable fuels themselves or purchase credits called Renewable Identification Numbers (RINs) from other companies that do the blending. Recognizing that this might create hardship for small refineries (those processing less than 75,000 barrels of crude oil daily), Congress created three exemptions: an initial blanket exemption through 2011, extensions based on a Department of Energy study, and case-by-case exemptions that small refineries could petition for based on “disproportionate economic hardship.”
In 2022, the EPA issued two decisions denying multiple small refinery exemption petitions. The April 2022 decision denied 36 petitions for the 2018 compliance year (including some that had previously been granted in 2019), and the June 2022 decision denied 69 petitions covering the years 2016 through 2021. These denials were based on EPA’s new interpretation that required hardship to be caused solely by RFS compliance costs and its “RIN passthrough” economic theory. The affected refineries challenged these denials as impermissibly retroactive, contrary to law, and arbitrary and capricious.
In the Supreme Court case, Environmental Protection Agency v. Calumet Shreveport Refining, LLC (No. 23-1229), the court granted certiorari on October 21, 2024, to determine the proper venue for challenges to the EPA’s denial of small refinery exemption petitions under the Clean Air Act’s Renewable Fuel Standard program, with oral arguments scheduled for March 25, 2025.
The case involves the EPA’s denial of 105 petitions filed by small oil refineries seeking exemptions from the Renewable Fuel Standard (RFS) program.
The central question is whether challenges to the EPA’s decisions must be heard in the D.C. Circuit because the agency’s actions are “nationally applicable” or “based on a determination of nationwide scope or effect”. Circuit
The Fifth Circuit, in a 2-1 decision, vacated the EPA’s denials and held that venue in that court was proper, denying the government’s motion to transfer the case to the D.C. .
The Supreme Court granted certiorari on October 21, 2024, to review the Fifth Circuit’s decision.
In May 2024, Growth Energy and RFA jointly petitioned the Supreme Court to overturn the Fifth Circuit opinion, and the EPA also petitioned the court.
Reported by oyez.org