By Stephanie Kelly
(Reuters) – A U.S. appeals court on Tuesday upheld a rule from President Joe Biden’s administration that capped the amount of biofuels oil refiners must blend into the country’s fuel mix between 2020 and 2022, rejecting a challenge from oil refiners to the mandates .
The U.S. Court of Appeals for the District of Columbia Circuit ruled that the U.S. Environmental Protection Agency, which administers the obligations under the Renewable Fuel Standard (RFS), lawfully exercised its discretion in establishing the requirements for the three years in question.
According to the RFS, oil refineries must blend billions of gallons of biofuels into the U.S. fuel supply, or purchase credits from those that do. The credits, known as RINs, are used by oil refiners and importers to demonstrate compliance with mandates.
In the past, small refineries could obtain an exemption from the requirements if they demonstrated financial harm from the mandates.
In 2022, the EPA set biofuel blending mandates for that year at 20.63 billion gallons, as well as retroactive volume mandates for 2021 at 18.84 billion gallons and for 2020 at 17.13 billion gallons. The agency denied waivers for oil refineries to be exempt from the requirements, but said it would give small refineries additional time to meet their 2020 blending obligations.
Oil refiners challenged the rule, arguing the standards were too high. Meanwhile, producers of so-called cellulosic biofuels, derived from wood waste and other feedstocks, also challenged the rule, saying the standards for cellulosic biofuels were too low.
“We believe that EPA complied with the law,” the court said in a ruling Tuesday.
Biofuel groups applauded the decision.
“The DC Circuit’s guidance allows EPA to ensure the integrity of its annual (Renewable Volume Obligation) and address shifts in market conditions and the way refineries meet their blending obligations,” Growth Energy CEO Emily Skor said in a statement .
