Americans for Clean Energy v. EPA

Renewable fuel companies and trade groups filed a motion requesting that the D.C. Circuit enforce the mandate more than three years after the court vacated EPA’s decision to reduce the total renewable fuel volume requirements for 2016 based on its “inadequate domestic supply” waiver authority. The movants contended that EPA’s delay in complying nullified the mandate and that the court could apply its mandamus power to compel compliance. The movants also urged the court to clarify that EPA could not retain the 2016 standards.

The D.C. Circuit Court of Appeals vacated and remanded EPA’s decision to reduce the total renewable fuel volume requirements for 2016 based on its “inadequate domestic supply” waiver authority. The court held that the Clean Air Act Renewable Fuel Program’s waiver provision authorized EPA to consider “supply-side factors affecting the volume of renewable fuel that is available to refiners, blenders, and importers to meet the statutory volume requirements” but did not permit EPA to “consider the volume of renewable fuel that is available to ultimate consumers or the demand-side constraints that affect the consumption of renewable fuel by consumers.” The D.C. Circuit upheld other aspects of the renewable fuel volume requirements for 2014, 2015, and 2016, including EPA’s authority to issue late biomass-based diesel volume requirements, EPA’s use of actual volumes from 2014 and 2015 to minimize hardship to obligated parties, EPA’s 2016 cellulosic biofuel projections, and EPA’s interpretation and application of the cellulosic waiver provision, which the court said gave EPA discretion to consider demand-side constraints in the advanced biofuel marketplace. Because it remanded the final rule to EPA, the D.C. Circuit concluded it was not necessary to address the obligated parties’ contention that EPA was required to reconsider its choice to apply the renewable fuel requirements to refiners and importers but not to blenders. The court said EPA could address the obligated parties’ comments regarding this “point of obligation” issue on remand and noted that EPA also was in the process of reviewing petitions for reconsideration of its current point of obligation regulation.

EPA filed a brief in the D.C. Circuit Court of Appeals defending the Renewable Fuel Standards (RFS) program’s annual standards for 2014, 2015, and 2016. EPA argued that the standards were neither too high nor too low, asserting that it had reasonably exercised its waiver authority to reduce the volumes of advanced biofuel and total renewable fuel required by the statute and that it used a reasonable methodology to set the standards. EPA also contended that its late promulgation of volume requirements for bio-based diesel was a reasonable exercise of its authority and satisfied its obligation to consider the relative benefits and burdens of the rule. EPA also argued that it was not required to reconsider its “point of obligation” regulation that made refiners and importers the obligated parties under the RFS program.