Federal Appeals Court Blocks Last Minute Trump Administration Refinery Exemptions

Before President Trump left office, the U.S. Environmental Protection Agency issued a total of three small refinery exemptions from RFS blending mandates (two waivers for the 2019 compliance year and one waiver for the 2018 compliance year).

However, the D.C. Circuit Court of Appeals temporarily blocked implementation of the three refinery exemptions and gave EPA until February 3 to provide an explanation of its action.

Several waiver requests remain outstanding for 2019 and 2020, which the Biden Administration will need to address although the Trump Administration did extend the compliance deadline for 2019 renewable volume obligations (RVOs) to November 30, 2021 as well as the 2020 deadlines to January 31, 2022, and June 1, 2022.

The Trump Administration delayed action on granting most of the small refinery exemptions for 2019 and 2020 biofuel-blending requirements due to ongoing litigation over the validity of such waivers.

The EPA decision came shortly after the U.S. Supreme Court agreed to review an U.S. Circuit Court of Appeals ruling last year invalidating 3 small refinery exemptions.

The court of appeals ruled that the EPA improperly issued the exemptions retroactively to small refineries whose earlier temporary exemptions had already lapsed.

Since 2017, the retroactive small refinery exemptions have reduced renewable blending volumes by nearly 4 billion gallons, primarily corn ethanol. Review by the U.S. Supreme Court will likely add volatility to the RINs market until a final ruling is handed down.

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