In their ruling, a unanimous three-judge panel held the agency erred in interpreting the federal Energy Policy Act as giving the agency the authority to waive Congress’ renewable fuel targets.
The Clean Air Act’s Renewable Fuel Program requires an increasing amount of renewable fuel to be introduced into the nation’s fuel supply each year.
As explained in the ruling, by mandating the gradual replacement of fossil fuel with renewable fuel, Congress intended the renewable fuel program to move the United States toward greater energy independence and to reduce greenhouse gas emissions.
By law, the EPA is the federal agency primarily responsible for implementing the program’s requirements.
In 2015, EPA promulgated a final rule setting several renewable fuel requirements for the years 2014 through 2017.
Those requirements were challenged in several lawsuits, many of which were later consolidated and heard by the D.C. Circuit.
Some plaintiffs in the consolidated actions argued that EPA set the renewable fuel requirements too high; others took the opposite view, complaining the requirements were set too low.
The court rejected all of those challenges but one.
“We agree with Americans for Clean Energy and its aligned petitioners … that EPA erred in how it interpreted the ‘inadequate domestic supply’ waiver provision,” said U.S. Circuit Judge Brett Kavanaugh, who wrote the court's ruling. “We hold that the ‘inadequate domestic supply’ provision authorizes 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.
“It does not allow 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,” Kavanaugh continued. “We therefore grant Americans for Clean Energy’s petition for review of the 2015 final rule, vacate EPA’s decision to reduce the total renewable fuel volume requirements for 2016 through use of its ‘inadequate domestic supply’ waiver authority, and remand the rule to EPA for further consideration in light of our decision.”
In a written statement, the National Corn Growers Association applauded the ruling.
“Today’s Court decision is a win for farmers, the biofuels industry, and consumers,” the association said. “This ruling affirms our view that the EPA did not follow the law when it reduced the 2014-2016 renewable fuel volumes below levels intended by Congress. The Court held that EPA was wrong to interpret the phrase ‘inadequate domestic supply’ to mean ‘inadequate domestic supply and demand.’ We agree with the Court that effectively adding words to the law through this interpretation simply exceeds EPA’s authority.”
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