Court Of Appeals Grants Oil Refiners Exemptions Following EPA's 2021 Decision

The Fifth Circuit Court of Appeals on Friday suspended the RFS compliance obligations for two refineries that were denied small refinery exemptions (SRE) by EPA in 2021. With this “exempt ruling,” these oil refiners will not be required to blend biofuels into their fuel to meet their 2021 blending obligations.

In 2021, the Biden administration rewrote its method for determining whether small refiners qualify for exemptions under “economic hardship”—an action that followed President Trump’s approval of 88 small refinery petitions in 2016 to 2020, which biofuel leaders estimate cost the industry billions of gallons in lost demand.

Read more: EPA's Small Refinery Exemption Data Under Fire by U.S. Accountability Office

Calumet Shreveport Refining LLC and The San Antonio Refinery LLC (TSAR)—the refineries the court suspended—are two of many small refineries that have challenged the EPA’s 2021 decision on what determines “economic hardship.”

Industry Responds

Emily Skor, Growth Energy CEO, said in a press release on Monday the supposed ‘cost’ to refineries is an “accounting fiction.”

“Congress never intended for these temporary exemptions to become a permanent handout. We agree with EPA’s view that it’s past time to end abuse of SREs, which destroy demand for low-carbon fuel and create needless uncertainty for all stakeholders, large and small,” Skor says.

Read more: 4 Things to Know About the Renewable Fuel Standard

In granting the exemption, the Court made sure to convey that the TSAR and Calumet are “entitled” to know the ground rules for what is considered “economic hardship” in EPA’s new rule book. 

However, the Court also says Calumet and TSAR are not entitled to more hardship waivers in the future.