10th Circuit Court Reverses EPA decision on Small Refinery Exemptions

On Friday, January 24, the 10th Circuit Court issued a decision that EPA had exceeded its statutory authority in granting small refinery exemptions (SREs) to three different refineries. More specifically, the court vacated the SRE’s granted to HollyFrontier’s Cheyenne and Woods Cross as well as CVR’s Wynnewood Refining Company.

In Renewable Fuels Association v. EPA, the court noted that the EPA had “exceeded the scope of their statutory authority” by granting the SREs to the above-mentioned refineries. The court had a multitude of reasons for the ruling, among which were the inconsistent manner in how EPA analyzes whether a small refinery is experiencing a “disproportionate economic hardship” and whether an extension of the exemption should have been granted when the refineries did not have a valid exemption at the time of application. For these reasons and many more, the court concluded that EPA had “exceeded the scope of their statutory authority” and vacated the lower court’s decision upholding EPA’s granting of the SREs.

This news comes as a huge win for the biofuels industry. In the past few years, the biofuels industry has seen a significant increase in the number of SRE’s granted without much recourse for those exempted gallons to be accommodated on the market. For the years 2017 and 2018, EPA considered 79 SRE petitions and of those considered, EPA granted 66 petitions. For the year 2019, EPA is already considering 21 petitions for SREs. 

If you have any questions about this, please contact RINAlliance staff at [email protected] or 515-224-7513.