Iowa political leaders blast US Supreme Court on renewable fuel decision

The Supreme Court on Friday said an expanded number of small refineries can seek an exemption from certain renewable fuel requirements.

The high court ruled 6-3 that a small refinery that had previously received a hardship exemption from complying with Clean Air Act requirements may obtain an “extension” of that exemption. That's even if the refinery let a previous exemption lapse.

Iowa Renewable Fuels Association Executive Director Monte Shaw made the following statement in response:

“We are extremely disappointed the Supreme Court didn’t uphold the 10th Circuit Court ruling on eligibility to request RFS refinery exemption extensions. I am not a lawyer, but it sure seems like the 10th Circuit Court got it right when they determined that a refinery can’t extend something it no longer has. However, it is important to remember this case only applied to one of the three major findings from the 10th Circuit Court."

"Today’s decision allows refiners to apply to extend RFS exemptions that have lapsed. But this case did not impact the 10th Circuit’s ruling that refiners must still prove economic harm directly related to compliance with the RFS. Just as importantly, the 10th Circuit also found that EPA cannot use RIN costs as a cause of economic harm while simultaneously admitting RIN costs are recovered in the refiner’s crack spread. As the Biden EPA has pledged to follow the 10th Circuit Court ruling, today’s decision allows refiners to request an RFS exemption extension, but it does not make it easier for refiners to actually receive one."

"We fully expect the Biden EPA to keep their commitment to the RFS and to apply the 10th Circuit Court standards relating to economic harm, and as a result, to deny the vast majority of RFS exemption extension requests that are pending or that will be submitted in the future.”

The case involved amendments to the Clean Air Act made in 2005 and 2007 that require transportation fuel sold in the United States to contain specified amounts of certain renewable fuels. Small refineries were exempt from that requirement until 2011.

Iowa Governor Reynolds released the following statement after the United States Supreme Court decision regarding small refinery exemptions:

“Today’s ruling by the U.S. Supreme Court is a disappointing setback for Iowa agriculture and our renewable fuel industry. The decision not only undermines demand for ethanol and biodiesel, but creates an environment where waivers could grow exponentially.”

“Now more than ever we need the Biden Administration to take a clear stance against small refinery exemptions in order to limit the negative impact of this ruling. The Administration should now set robust annual renewable volume obligations and clear all additional hurdles for consumers to access cost-effective, clean-burning renewable fuels.”

“Despite what happened today, the fight is far from over and we will never back down in defense of this essential Iowa industry.”

The law also allowed the Environmental Protection Agency to extend the exemption for individual small refineries if complying would subject them to “disproportionate economic hardship.”

Another section of the law says that a small refinery can ask the EPA for an extension of the exemption “at any time.”

Iowa U.S. Senator Joni Ernst sent out the following tweet on the Supreme Court ruling:

“I’m disappointed w/ today’s SCOTUS decision, but it makes the stakes absolutely clear: The Biden @EPA can side w/ America’s farmers & producers, or Big Oil. No matter what, Iowans can be sure I will always stand w/ biofuel, and continue fighting tooth & nail to defend the #RFS.”

President Joe Biden's administration had argued that to get an extension a refinery had to have maintained a continuous exemption since 2011. The administration said that followed from the word “extension.”

But three small refineries told the court that the phrase “at any time” meant they did not have to maintain a continuous hardship exemption to seek one.

Iowa Congresswoman Ashley Hinson released the following statement:

"Today's Supreme Court decision would allow some oil refineries to have expired SRE waivers from biofuel blend mandates reinstated. This is a devastating blow to farmers in Iowa and across the nation. The Administration must not grant these exemptions to small oil refineries and should work to maintain the integrity of the renewable fuel standard, and I will continue calling on them to do so. I will never stop fighting for Iowa's farmers and biofuel producers in Congress."

A federal appeals court had said a continuous exemption was required for an extension. The Supreme Court disagreed.

The case involves HollyFrontier's Cheyenne Refinery in Wyoming, HollyFrontier's Woods Cross Refinery in Utah and Wynnewood Refining in Oklahoma. They argued that siding with the Biden administration would eliminate the exemption for most small refineries in the United States.

Growth Energy CEO Emily Skor also released the following statement on Friday’s ruling:

“The Supreme Court disagreed with the lower court’s view of extensions, but today’s decision does nothing to change the 10th Circuit’s ruling that exemptions cannot be granted when refiners cannot properly trace their hardship to compliance with the Renewable Fuel Standard (RFS),” said Skor. “In the past, the biofuel industry has looked to the courts to halt abuse. Today, new leaders at the Environmental Protection Agency have shown a willingness to defend the RFS, most recently by reversing three improperly granted exemptions. We look forward to working with the Biden administration to keep a lid on exemptions, further strengthen the RFS, and fast-track our progress toward decarbonization. Engine smart and earth kind biofuels are vital to achieving the nation’s climate goals.”