The lawsuit, filed in the 10th Circuit U.S. Court of Appeals in Denver, targets three waivers given to refineries owned by CVR Energy Inc. and HollyFrontier Corp. Icahn holds a majority stake in CVR. Refiners must blend increasing amounts of biofuels such as ethanol into the national fuel mix each year under the Renewable Fuel Standard, but the Environmental Protection Agency recently attempted to do away with the requirement in an attempt to appease oil-producing states. But the move landed the administration in hot water with corn states and President Trump announced that biofuel levels would not change.
The EPA can issue waivers to small refiners if adhering to the RFS would cause undue economic hardship. Such waivers were seldom granted in the past, but a successful lawsuit by Sinclair Oil Corp. last year made the EPA broaden its definition of "economic hardship," which has led to far more waivers. Ethanol and conservation groups fear the waivers are a backdoor way for oil companies to get around the RFS without causing more trouble with corn-state politicians.