On Friday, a federal appeals court ruled that the Environmental Protection Agency was wrong to give three biofuel waivers to oil refineries in 2017. The decision "has cast doubt on the legitimacy of dozens of other EPA exemptions granted under similar circumstances, according to industry experts and agency data," Richard Valdmanis reports for Reuters.
The exemptions are meant to help small refiners that would suffer financially if forced to comply with the Renewable Fuel Standard's requirement to blend ethanol into the fuel supply. Corn and ethanol interests say the Trump administration has granted an unusually large number of waivers to help the oil industry, and say the increased waivers have hurt the ethanol industry, Valdmanis reports.
"The oil industry argues the waivers are needed to protect refining jobs, and says the waivers do not affect actual ethanol usage," Valdmanis reports. However, at least 18 ethanol plants have shuttered because of the declining demand for ethanol. The court's decision "spells uncertainty for a handful of independent refiners that secured lucrative waivers from the Trump administration, and could fire up prices for the biofuel blending credits those facilities need to comply" with law, Valdmanis reports.
According to the court's decision, "the EPA overstepped its authority to grant the waivers because the refineries had not received exemptions in the previous year. The court said the RFS is worded in such a way that any exemption granted to a small refinery after 2010 must take the form of an 'extension'," Valdmanis reports. "It also noted research showing oil refineries are able to pass the costs of complying with the RFS to consumers by raising fuel prices, suggesting the waivers were not needed to help the oil refineries financially."
The exemptions are meant to help small refiners that would suffer financially if forced to comply with the Renewable Fuel Standard's requirement to blend ethanol into the fuel supply. Corn and ethanol interests say the Trump administration has granted an unusually large number of waivers to help the oil industry, and say the increased waivers have hurt the ethanol industry, Valdmanis reports.
"The oil industry argues the waivers are needed to protect refining jobs, and says the waivers do not affect actual ethanol usage," Valdmanis reports. However, at least 18 ethanol plants have shuttered because of the declining demand for ethanol. The court's decision "spells uncertainty for a handful of independent refiners that secured lucrative waivers from the Trump administration, and could fire up prices for the biofuel blending credits those facilities need to comply" with law, Valdmanis reports.
According to the court's decision, "the EPA overstepped its authority to grant the waivers because the refineries had not received exemptions in the previous year. The court said the RFS is worded in such a way that any exemption granted to a small refinery after 2010 must take the form of an 'extension'," Valdmanis reports. "It also noted research showing oil refineries are able to pass the costs of complying with the RFS to consumers by raising fuel prices, suggesting the waivers were not needed to help the oil refineries financially."
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