EPA defends 2023-2025 renewable fuel volumes

The US Environmental Protection Agency (EPA) says it did not violate the law when it set renewable fuel standard volume mandates for 2023-2025, rebutting industry and environmentalist concerns about the agency's reasoning in a recent court filing.

EPA told the US Court of Appeals for the District of Columbia Circuit in a filing late last week that it "lawfully and reasonably" set volumes for cellulosic, biomass-based diesel, advanced, and conventional biofuels for 2023-2025, relying on "the same type of analyses" that the court has approved in prior cases. Among other arguments, the agency criticized arguments from refiners that said cellulosic biofuel requirements relied on "overly aggressive" assumptions and from environmental groups that said the agency did not sufficiently consider potential environmental impacts.

There is related litigation before the court involving the agency's reporting requirements for biogas producers and the agency's rejections of petitions to exempt small refineries from 2022 requirements. The DC Circuit affirmed biofuel blending requirements for 2020-2022 in May this year, and EPA says the court should make a similar determination about the agency's subsequent rulemaking.

EPA's broad defense of its 2023-2025 blending requirements, while not surprising, suggests that the agency is holding firm against recent calls from industry groups to acknowledge past mistakes and shift course.

The Clean Fuels Alliance America asked EPA in a formal petition last week to raise volume requirements for biomass-based diesel by more than 2mn USG each for 2024 and 2025. And EPA recently rejected a petition from the American Petrochemical and Fuel Manufacturers that asked for a partial reprieve from cellulosic biofuel obligations because of an undersupply of D3 renewable identification numbers.

The agency, in its latest filing, quoted from prior DC Circuit rulings that said courts should be "particularly deferential" to agencies "in matters implicating predictive judgments." In other words, an agency misjudging future biofuel supply is not reason alone to overturn prior blending requirements, EPA argues.

The US Supreme Court has been increasingly skeptical of deferring to executive agencies like EPA, and just last week struck down a long-running precedent that said courts should afford agencies significant leeway when interpreting ambiguous statutes.

EPA is technically required to finalize renewable volume obligations for 2026 by November this year, but the agency has missed deadlines before and many in the biofuels industry are preparing for a rulemaking after this year's presidential election. Adding updates to previously set obligations would add further complexity to the agency's review.

By Cole Martin